Iran’s return has not changed yet the alignment of forces on the global oil market, said the CEO of SOCAR Trading SA (the marketing arm of Azerbaijan’s state oil company SOCAR) Arzu Azimov in his interview with Bloomberg.
Azimov said that such fears are always exaggerated.
The market has absorbed additional volumes from Iran against the decline in offers from such supplying countries as Libya, Venezuela and Nigeria, according to Bloomberg.
Azimov believes that new Iranian barrels somewhat pushed competing suppliers.
The share of Iranian oil on the European market is negligible due to logistical difficulties, according to Bloomberg.
Iran is not yet able to regain access to SuMed (Suez-Mediterranean) pipeline. Oil companies of the Middle East can transport larger amount of oil to the Mediterranean region via SuMed pipeline rather than the Suez Canal.
A majority of international sanctions against Iran were lifted in January 2016. Iran plans to increase oil export to regain its market share that was lost due to the sanctions. Currently, the country produces 3.8 million barrels of oil per day and exports about two million barrels per day.
Moreover, SOCAR Trading CEO noted that oil prices are unlikely to fall below $40 per barrel until late 2016.
It can lead to the fact that wells in the US will be closed, reducing the total supply volume in the market, said Azimov adding that the growth of oil prices over $50 per barrel until late 2016 is also unlikely, because Brexit has cooled the ardor of “oil bulls.”
Headquartered in Geneva, SOCAR Trading was incorporated in December 2007 as the marketing arm of SOCAR with a mandate to market Azerbaijani barrels produced from the Azeri-Chirag-Guneshli field and other surrounding fields in Azerbaijan.