MOSCOW: It would be difficult for Iran to revive its oil output to former levels quickly even if international restrictions on its exports are lifted, International Energy Agency (IEA) head Maria van der Hoeven said yesterday.
Van der Hoeven was speaking to reporters in Moscow after Iran and six world powers reached a deal on Sunday to curb Tehran’s nuclear programme in exchange for limited relief on sanctions.
“If some oil sanctions relief will happen ... it’s unlikely that Iran would be able to jump back to pre-sanctions levels immediately,” van der Hoeven said, whose agency monitors oil markets on behalf of developed economies.
The deal struck in Geneva leaves US and European oil sanctions in place for six months, but an easing of a ban on European shipping insurance may ease crude exports to the Opec member state’s big Asian customers.
Van der Hoeven declined to comment when questioned about Iran’s access to shipping insurance for oil export cargoes. The US and EU sanctions have slashed Iran’s oil exports to around 1m barrels per day (b/d) from 2.5m b/d before they were imposed.
Meanwhile, oil fell following the breakthrough deal between world powers and Iran that led to expectations for an eventual increase in the Opec nation’s exports.
Benchmark Brent fell up to $3 a barrel in early trading following the weekend agreement, which halts Iran’s most sensitive nuclear activity and suspends some sanctions by the United States and the European Union on several sectors of Iran’s economy for an initial six-month period.
The early losses were pared on expectations an increase in oil shipments from Tehran would not be coming soon. Tough sanctions against Iran in the past two years have slashed exports from the Opec member by more than half, keeping Brent above $100 a barrel. “(The market is) realising, at least in the next few months, there’s not going to be a substantial increase in oil exports,” said Amrita Sen, chief analyst at consultants Energy Aspects.
Brent fell 64 cents at $110.41 at 1707 GMT, after dropping to as low as $108.05 earlier in the session. US oil traded down $1.01 to $93.83, after falling to a low of $93.08. US RBOB petrol futures led the oil complex lower following news that Phillips 66’s Bayway refinery in New Jersey had returned from maintenance on a petrol unit.
Reuters
