Energy Agency: Possibility of a Surge in Iran's Oil Production Following Sanctions Lifting

The International Energy Agency in its latest report states that Iran is theoretically capable of a sudden increase in its oil production by 800,000 barrels per day. Last month, Iran produced 2.8 million barrels of oil daily, but the agency says this figure could short-term rise to 3.6 million barrels. According to a report on Wednesday, April 15, by Reuters from the International Energy Agency, which advises industrial countries on energy, despite the increase in global oil demand, achieving balance in global markets will likely take longer than previously anticipated. The report has raised its forecast for global oil consumption growth by 90,000 barrels per day compared to its previous assessment, stating that this year, oil consumption is expected to increase by about 1.08 million barrels per day compared to 2014, reaching 93.6 million barrels. However, this international body based in Paris states that although the need for OPEC oil is 29.5 million barrels per day, the twelve members of this organization collectively produced 31.02 million barrels last month. According to the report, Saudi Arabia, which increased its daily oil production by 390,000 barrels last month to reach 10.1 million barrels, is likely to increase its production again in the summer to reach 11 million barrels per day. Global oil prices have sharply fallen since the second half of last year, dropping from $115 to around $60 in recent days. OPEC members, in their meeting last autumn, opted for continued higher production to maintain their market share instead of cutting production to raise oil prices, although this policy faced opposition from Iran and Venezuela. The International Energy Agency's report further states that a potential comprehensive nuclear agreement on June 30 of this year, which would lead to the lifting of economic sanctions against Iran, would pave the way for a significant increase in Iran's oil production within a few months. The report adds that the issue of increasing Iran's oil exports could motivate other producers to increase their oil production to maintain their markets and prevent Iranian oil from replacing theirs. On the other hand, Iran has 30 million barrels of oil stored offshore that could enter global markets with the lifting of sanctions. The report states that while Iran can theoretically increase its oil production significantly, it is unlikely to do so in practice until next year, but if it chooses to, it will be capable of increasing its production and exports.