Iran’s contributions to the global oil field aren’t likely to kick in until 2016, and even at 500,000 barrels per day, it’s likely not enough to move the needle between global supply and demand, according to a Deloitte LP working paper.
Co-author Andrew Slaughter, executive director at the Deloitte Center for Energy Solutions, told Rigzone that Iran’s ramp-up will be relatively moderate compared to the country’s long-term potential.
“It’s a moderating force on our price recovery, rather than actually cause prices to come down a lot further if [Iranian] oil comes back,” Slaughter said, “just because the supply-demand balance next year looks quite a bit tighter already than it was this year.”
The complications of a global oil market mean that it won’t just be the return of Iranian oil that is a factor in the supply-demand equation. Chinese demand could further weaken, and there is a possibility of a more widespread economic downturn, he explained.
On the domestic front, Iran’s ramp-up in oil exports could come around the same time that the U.S. Congress is weighing the ban on exporting U.S. oil.
“I don’t think [Congress] will look at it just through the lens of Iran. There are a whole lot of other factors they’ll take into consideration, including a lot of domestic factors, such as whether it would impact gasoline prices and that sort of thing,” Slaughter said. “Iran adds to the conversation, but it’s maybe not the dominant driver. Something like this evolves over time and anything we say right now could easily get overtaken by events and could play out a different way, but we just take our best shot in looking at likely outcomes.”
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