As Joe Biden seems adamant at joining the Joint Comprehensive Plan of Action (JCPOA), anti Iran elements have once again started talking about adverse impacts of re-entry of Iran in oil trade.
Fitch Solutions, a subsidiary of Fitch Ratings, which is one of three biggest credit rating agencies of United States, has forecasted a 6.8% growth in Iranian oil exports in 2021 if the US comes back to the 2015 nuclear deal.
In one of its latest reports dubbed “Iran Oil and Gas Report”, Fitch has stated that crude oil exports of Iran would double in 2022 compared to 2020.
“The prospects for the Iranian oil sector have brightened significantly following Joe Biden's victory in the US presidential election, He has indicated re-entry of the US into the Iranian nuclear deal, paving the way for a roll-back of secondary sanctions and recovery of around 2.0 million barrels per day (bpd) in oil production,” the report said.
Fitch also stated that Iranian gas production is also expected to rise in the coming years considering the new developments in the country’s giant South Pars gas field that Iran shares with Qatar in the Persian Gulf.
“However, Iran needs to find new export markets in neighboring countries to maximize the productivity of the new output capacities,” the report reads.
Fitch further mentioned development of the Iranian oil and gas industry’s downstream sectors saying, “The outlook on the downstream is relatively robust, with the National Iranian Oil Company (NIOC) making continued investments to expand and upgrade its refined fuels production, and with a robust demand outlook for both oil and gas as the market recovers from the combined effects of Covid-19 and US nuclear related sanctions.”
Also, the study of the risk index of the upstream sectors of the country’s oil and gas industry in this report shows that, given the huge oil and gas resources, these sectors are reasonable options for investment in the country.
According to the report, Iran ranks fourth among 12 countries in the region in terms of the oil and gas industry’s risk-return index, while the country occupies 20th place among the world’s top 72 oil-producing countries.
Iranian oil production and exports have been both increasing over the past few months despite the US sanctions. Iranian Oil Ministry has announced its readiness for boosting the country’s crude oil output to the pre-sanction levels in case of the US rejoining JCPOA.
Back in January this year, the data from SVB International and two other firms indicated that Iranian oil exports were climbing in January after a boost in the fourth quarter despite US sanctions.
Iran’s Deputy Oil Minister Amir Hossein Zamaninia had said earlier that the country started boosting its oil production and would be able to reach pre-sanction levels within two months.
Iranian oil won’t create any surplus in the oil market and the market will be able to accommodate the country’s maximum oil output of around 3.9 million to four million barrels a day, Bloomberg quoted Zamaninia as saying on the sidelines of the Iran Oil Show in Tehran in late January.
