March 17, 2015

SENDING VLAD BACK TO THE SANITARIUM:

Iran's Nuclear Deal Could Open Oil Flood (BILL SPINDLE and  BENO√éT FAUCON, 3/17/15, WSJ)

Western powers put Iran's export limit in place relatively recently, as part of wide-ranging economic sanctions dating back decades and aimed at bringing Tehran to the bargaining table over its nuclear program. Washington and its allies say Iran is working toward producing nuclear weapons. Tehran says its program is peaceful.

While a deal is far from certain, Iran's Oil Minister Bijan Zanganeh said Monday that the country could double its exports quickly.

"In case the international sanctions against Iran are lifted, one million barrels a day will be added to the country's crude-oil production and exports in several months," Mr. Zanganeh was quoted as saying by his ministry's news agency Shana.

He also predicted the additional Iranian supply wouldn't "significantly affect crude-oil prices and world markets."

Iran has already sounded out Asian oil buyers about taking extra supplies, according to two Iranian oil officials. "We have told our Asian customers we are ready to supply more when sanctions are lifted," one Iranian oil official said. [...]

After an initial burst of production, however, Iran is likely to struggle with a plethora of challenges in pushing exports back even to the roughly four million barrels before sanctions began taking their toll.

Iran's active oil fields need maintenance and new technology to stave off a rapid falloff in productivity. Meanwhile, the withdrawal of foreign firms and the loss of revenues due to sanctions, along with simple mismanagement, have prevented the development of rich new fields.

Mr. Zanganeh, who took over as oil minister after the election of President Hasan Rouhani a year and a half ago, has earned high marks for instilling a new sense of focus across the sprawling sector.

Posted by at March 17, 2015 5:38 PM
  

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