Iran is Ready to Supply Oil and Gas in Both Directions- Europe and Asia

• 05.19.2015, 13:50
•  Region,  World

The time for the Iranian sanctions to be lifted is getting closer. Iran’s Deputy Oil Minister Roqneddin Javadi said on Monday that they hope to come back to the export levels they had before the sanctions (2.5 million barrels a day), Sputnik News reports.

Javadi also added that he was expecting the oil price to rise to around $80 a barrel by the end of 2016. Iran is looking forward to export more than 50 percent of its crude oil to Asian market. The ban on the oil exports since 2012 has twice reduced overseas sale to about 1 million barrel per day. According to the minister OPEC is not going to reduce its production. Upcoming meeting of OPEC is on June 5, however it is unlikely that a decision will be made to cut its output in June. OPEC’s supply is also consumed mostly by Asian market.

Iran's willingness to enter the European market became obvious with the country's reportedly signaling its readiness to start supplying oil to the West once bans are lifted from crude oil. Tehran told on Monday that the country can cover the half of oil demanded in the European market. It is going to produce about 2.7 million barrels per day.

Tehran’s officials noticed that although the country is trying to sell its oil in all markets, Asia will be priority for them.

Iran’s Deputy Minister of Petroleum Amir Hossein Zamaninia in his turn stated that there is no limitation for oil investment for the Americans. He added that Iran’s oil and gas is open to American investment, but U.S. companies should be in agreement with local companies under certain terms. The investment call applies to European companies as well.

It is appropriate to state, that although American companies under the U.S. law are banned to start any business in Iran, they have always had interest in trade opportunities in Middle Eastern countries especially in Iran. Before the sanctions were imposed on Iran many U.S. companies were indirectly trading with Iran through subsidiaries.

Iran will face strong competition in both Asian and European markets. OPEC is the biggest competitor in Asian market. As it is written above it is not going to reduce its output, which means that the prices will continue to stay low. Russia is another competitor for Iran in the European market.

However sanctions over Russia and other economic conflicts between Western powers and Russia make ground for Iran to intervene in European gas and oil market. The decision by the Western powers to lift sanctions from Iran’s crude oil will reduce their dependence from Russian oil and gas.