By June 2016, Iran was already producing around 3.64 million barrels a day. Oil prices surged by more than 1.5 percent last Thursday after API reported an inventory drawdown of 12 million barrels.
Advertisement
“It is hard to predict how much oil could be brought on stream from such activities, but we believe it will not be large enough to prevent average total USA oil production from falling between 500-700,000 bpd this year”, Samba said.
The slight increase is said to be associated with the forthcoming report on the US oil inventories.
The remarks came after Iran said earlier that it may support a new attempt this year by OPEC plus non-members such as Russian Federation to stabilize oil production.
Oil prices tumbled again today in Asian trade on a pick-up in drilling and a strong dollar as speculation swirled that the US Federal Reserve could hike interest rates as soon as this month. He went on to describe the simultaneous increase in oil production as “not a coincidence”.
The planned terminal would have a storage capacity of 20 million barrels and cost around $2.2 billion to build.
OPEC – a group of 14 major oil exporting nations – works to coordinate their production to control price fluctuations.
That production decline would drag Saudi Arabia’s output down to about 10.63 million barrels per day. “The shuttle diplomacy is going on to clear which level is considered an aim for Iran”.
Iran has repeatedly said it needs to reach a level of output of at least 4 MMBPD before it agrees to any deal. Energy consultancy Wood Mckinsey had then confirmed that Iran’s production was only 3.7 million barrels a day.
United States dollar strength may also temper any gains, as will the sheer size of stock levels that need to be worked down. Looking at its current production figures, it is clear that Iran will find it extremely hard to substantially increase its production levels in the coming time.
Last week, Tehran voiced plans to continue boosting its oil output to pre-sanction levels over the next couple of months, worsening tension with rival Saudi Arabia.
Advertisement
“These numbers show Iran has little room left to increase its production”, said an OPEC delegate from a Persian Gulf country that isn’t Iran or Iraq. I am not receiving compensation for it (other than from Seeking Alpha).
