US: Iran's Nuclear Deal Will Lower Next Year's Oil Prices

The US Energy Information Administration, in its latest estimate published on the official website of this agency affiliated with the US Department of Energy, states that oil prices next year will be lower than previously predicted due to Iran's nuclear deal. The report mentions that Iran currently has at least 30 million barrels of oil on the water, more than half of which is condensate. Condensate is a type of ultra-light crude oil produced from gas fields. The US Energy Information Administration states that Iran will send an additional 100,000 barrels of oil to the market daily by the end of this year, and this figure will further increase next year with the implementation of the nuclear deal. Before the nuclear deal, forecasts indicated that oil prices would reach $67 per barrel next year, but it is now expected to be $59. According to this report, the increase in Iran's oil production, given the surplus oil in the market and the slow growth rate of oil consumption, will lead to global oil prices being lower than previously predicted for next year. The report also states that Iran may face a lack of demand for its condensate sales, as evidence suggests that Asian customers have sufficiently met their needs for this crude oil. However, the report adds that Iran could sell a significant portion of its condensate reserves by offering high discounts. The report further adds that the remaining oil on the water from Iran (oil stored on ships) includes medium and heavy crude oil, which Iran is expected to sell immediately due to high global demand for this type of oil. The energy agency adds that evidence indicates that part of the mentioned oil reserves is currently being exported. Other agencies, such as the International Energy Agency, Reuters research, and the Windward company, which specializes in monitoring shipping activities, indicate that Iran's oil on the water could exceed 50 million barrels. According to the US Energy Information Administration, Iran's oil production was about 3.7 million barrels in 2011, which rose to just over 2.7 million barrels in 2014, and is currently above 2.8 million barrels, but it is expected to reach 3.5 million barrels per day in the second half of next year. The report also refers to a recent assessment by the International Energy Agency, which stated that Iran could increase its oil production by up to 600,000 barrels per day in the short term after sanctions were lifted in 2016. In this context, the World Bank also predicted this week that a one million barrel increase in Iran's oil production could lower global oil prices by $10. Meanwhile, the price of West Texas Intermediate oil reached about $40 yesterday, the lowest figure in the past 6.5 years. The agency had predicted that US oil production would decrease by up to 400,000 barrels next year and that the growth rate of oil production in non-OPEC countries would also significantly decrease.