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News outlets in China and Iran have been reporting that the two nations have agreed to a joint venture in the Persian Gulf. The project is an oil terminal that will be constructed on Qeshm Island in the southern part of the Gulf.
The terminal should transform the island into a center for both oil production and storage. When complete, the terminal will be able to accommodate tankers up to 140 feet in depth and store approximately 30 million barrels of crude. When the first stage of construction is finished, the facility on Qeshm Island will be capable of storing 10 million barrels of oil from Iran’s West Karoun region. Ultimately, the terminal is expected to generate $300 million per year.
At 1,491 square kilometers in size, Qeshm Island itself is the largest island in the Gulf. The island will also be home to a financial center, and several Russian and Chinese banks are reportedly interested in opening offices there. Iran hopes that foreign institutions will enter the nation’s domestic market.
Iranian oil exports topped 2 million barrels per day this week, in the wake of some economic sanctions on that nation being lifted. The sanctions were partially lifted after the country conformed to terms of multilateral nuclear agreement.
Related: Expect Much Higher Oil Prices As The Cycle Comes To An End
Last year the country was averaging 1.4 million barrels per day in 2015. Before 2011 when the sanctions began, Iran averaged 2.6 million barrels per day. Mohammad Bagher Nobakht, a spokesperson for the Iranian government, stated that since the sanctions are being lifting, Iran is within its rights to ensure a larger market share.
By Lincoln Brown for Oilprice.com
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Lincoln Brown is the former News and Program Director for KVEL radio in Vernal, Utah. He hosted “The Lincoln Brown Show” and was penned a…