THE INTERIM deal that Iran reached with world powers over the weekend will reduce concern about oil supply disruption, IHS CERA predicted today.
"This lowers anxiety about worsening relations between Iran and world powers," it pointed out. "This means that there is less concern about the risk of a disruption to oil supplies from the critical Gulf region because of military action or tighter sanctions while negotiations continue."
In addition, the EU has agreed under the interim accord to suspend sanctions on shipping insurance, a change that could facilitate Iranian oil shipments within the volumetric limits that the US set on buyers of Iranian crude.
The concession on shipping insurance would not significantly add to Iranian oil exports by itself, given that both Iran and its major buyers have already worked out ways to insure shipments at current levels.
But the suspension will not result in EU countries importing Iranian oil because sanctions barring such imports remain in place, pending further negotiations.
On a positive note, IHS CERA believes that Iranian oil output could rebound in due course.
With sanctions limiting exports, Iran has throttled back its oil output to about 2.7M barrels per day, from abiout 3.6M b/d.
About 500,000 b/d to 600,000 b/d could be restored in three months or so, assuming Iran is able to export such increased volumes, IHS CERA said.
The remainder theoretically could come back onstream within a year, assuming Iran has access to capital, equipment and the expertise needed for this purpose. But the new Iranian government
Topic: Iran deal seen pushing down risk of oil disruption (Read 1321 times)