The increase in Iran’s oil exports by 1 million barrels a day could lower the price by 13%

The increase in Iran’s oil exports by 1 million barrels a day could lower the price by 13%

WASHINGTON, 5 February. The increase in oil exports by Iran to 1 million barrels a day can lower oil prices by 13%, said in an interview with the chief economist of the world Bank Middle East and North Africa (MENA) Shantayanan Devarajan.

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© AP Photo/Matthew Brown

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“We simulated this situation using a global model of General economic equilibrium, in order to isolate the effects of the return of Iran to the markets. We find that the increase in Iranian oil exports by 1 million barrels a day (and they can achieve this in about a year) would lead to a decline in world oil prices by 13%, i.e. approximately $3 per barrel. The assessment is based on the assumption that other oil producers would not reduce the extraction and export of oil,” said Devarajan.

Sanctions were lifted from Iran on January 16 immediately after the announcement in Vienna about the beginning of the implementation of the nuclear agreement between Tehran and the “six” international mediators (the five permanent UN security Council members and Germany).

Earlier, the management of the oil industry of Iran has repeatedly stated that Iran is ready to increase production and export of its oil by 500 thousand barrels a day immediately after the lifting of sanctions.

The draft budget for the next year (Iranian calendar starts March 21) is provided, the volume of daily exports to 2.25 million barrels. To date, the exports amounted to about 1 million barrels a day.

The full text of the interview is available on the website