The U.S. and its allies lifted economic sanctions against Iran over the weekend and energy experts say the Islamic republic could produce as much as 3.3 million barrels per day by the end of 2016.
“Consistent with these forecasts for average annual production, Iran’s crude oil production reaches 3.3 million b/d at the end of 2016 and 3.7 million b/d at the end of 2017,” according to the U.S. Energy Information Administration (EIA).
Source: The U.S. Energy Information Administration
The United Nations announced Saturday that Iran was complying with a deal over its nuclear program that was hashed out last year. The U.N.’s positive report triggered an end to economic sanctions against Iran, including those on the country’s petroleum exports.
Without sanctions, Iran can now export its crude oil and other liquid fuels around the world, adding to the current global oil glut keeping prices down more than 70 percent below where they were in summer 2014.
“Most of Iran’s forecast production growth comes from Iran’s preexisting crude oil production capacity that is currently shut in, while the remainder comes from newly developed fields,” EIA noted. “Iran has a number of new oil fields that Iranian and Chinese companies have been developing over the past several years, which have the potential to add 100,000 b/d to 200,000 b/d of crude oil production capacity by 2017.”
The prospect of more oil on the market has Saudi Arabia and other OPEC members worried. Countries that rely heavily on crude oil export revenues have seen their finances deteriorate in the last year or so as crude prices dropped from more than $100 a barrel in June 2014 to about $30 per barrel Tuesday.
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