Is there another alternative if Iran withdraws its oil supply?
Economic sanctions still continue to be directed towards Iran because of its refusal to halt its nuclear program. In a move to bring an end to such decisions, Iran has now threatened that it will keep its oil away from the global market.
While in Dubai, Iran’s oil minister warned that they will suspend all oil exports if the U.S. tightens sanctions. He also took the opportunity to refute claims that its oil production has dwindled and claimed that productions are “currently 4 million barrels per day,” but didn’t give any figures on oil exportation. Despite analysts concluding that the numerous sanctions are affecting the Iranian economy, Qasemi boasted that “Iran has been facing U.S. sanctions for 30 years while successfully managing its oil sector.”
The IMF estimates Iran’s output this year to be at an average of 3.6 million bpd due to the sanctions. It was at 4.1million bpd in 2011. Bloomberg has warned that if Iran withdraws its supply from the global market, a sudden and sharp increase in global crude prices will follow because it will surely affect the price.
Iran, formerly the second-biggest producer among the 12 members of the OPEC, has slipped to fourth. Iran’s production is widely believed to have been hit by Western economic sanctions this year, and the figure given by Qasemi is substantially higher than many outside estimates.
Last month, Qasemi claimed that oil prices should at least attain $150 per barrel and considered $118 to be too low. Crude oil prices have now fallen below $110 and the minister blamed the escalation of prices on politics. He claimed that they “don’t want the price of oil to increase; it has to be a logical price.”
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