The lifting of sanctions against Iran will lead to further oversupply in the oil market, so the fact that oil prices reached bottom and will resume growth, it is unlikely, according to the Chairman of the Board of Directors of UBS.
MOSCOW, 20 Jan. World oil prices may fall even more after the return of Iran to the oil market, said in an interview with Bloomberg, the Chairman of the Board of Directors of UBS Group AG Axel Weber.
“I don’t think the oil prices reach the bottom and will resume growth soon. The lifting of the sanctions on Iran, in my opinion, will lead to a further increase in supply,” said Weber.
On Tuesday, the International energy Agency in its forecast has predicted that Iran by the end of the first quarter of 2016 will be able to increase the volume of oil supplies to the world market approximately on 300 thousand barrels a day. In a report published in December 2015, the IEA report noted that the oversupply of oil on the world market will last until at least the end of 2016, the Agency does not exclude further decline in global oil prices amid persisting in 2016, the excess of supply over demand.
Saturday, January 16, Iran got rid of most of the sanctions — IAEA presented a report confirming the readiness of the authorities to implement it through a long negotiation program by a significant reduction of its nuclear potential. Later removing economic and financial sanctions with Iran was confirmed by the head of EU diplomacy Federica Mogherini and U.S. Secretary of state John Kerry.
During the sanctions, Iran exported about 1 million barrels of oil per day, mainly in China, India, Turkey, Japan and South Korea. Earlier, Iranian oil Minister Bijan Namdar Zanganeh spoke of plans to increase the country’s daily oil supplies to the world market on 500 thousand barrels a day immediately after deregulation, and after 6-7 months to increase exports twofold to 2 million barrels.
Since the beginning of summer 2014 to the end of last year, oil prices have fallen more than tripled — from 115 to 36 dollars per barrel of Brent, and in 2016 already dropped below $ 30. Fundamentally the decline is due to the high level of production in a world with slower demand, including because of the situation in China. However, such a deep drop, experts have been increasingly linked to financial factors, including the strengthening of the dollar. In forecasts they are generally single — low oil prices for a long time.