Potential Impact of Iran Deal
December 11, 2013
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In our view, the deal eventually reached at the weekend between Iran and the UN P5+1 (or E3/EU+3, as sometimes described) does not change the short-term global oil market outlook significantly.
The agreement with respect to the likely trend in Iran’s oil exports is broadly in line with our expectations (see World Oil Market Report 8th November, p3) in that Iran’s crude exports are aimed to be kept running at average levels of around 1 mmb/d during this interim 6-month deal. However, there is a possibility of slippage of perhaps 100-200 kb/d above this target figure, on the back of the agreement that EU/US sanctions on “associated insurance and transportation services” will be suspended on current Iranian oil exports in order to enable them to continue. In theory, this should not allow extra volumes, but it may prove difficult to monitor the precise pattern of liftings, as Iranian crude exports have tended to fluctuate from month-to-month anyway in the past year.
Further information on FGE's Iran Oil & Gas Service can be found online by clicking on the link below.