The United States won’t be able to bring Iranian oil exports to zero because the other producers can’t offset the loss of all of Iran’s oil barrels in an already tight market, Iran’s OPEC governor Hossein Kazempour Ardebili told Reuters on Friday.
According to Kazempour—whose position as Iran’s OPEC governor makes him the second most senior member after the oil minister at OPEC meetings—an already emerging “supply shortage” and little spare capacity virtually everywhere means that the United States can’t achieve its goal of bringing Iranian oil exports down to zero when sanctions on Iran’s oil industry return in early November.
“There is no spare capacity anywhere,” Kazempour told Reuters.
Earlier this week, Iran’s First Vice President Eshaq Jahangiri said that Iran’s oil sales will “never reach zero,” the Iranian oil ministry’s news service Shana reported. The official admitted that Iranian oil exports would drop, but reiterated Iran’s position that the U.S. sanctions would not succeed in cutting off all of the country’s oil sales.
“The US is attempting to bring Iran’s oil sales to zero by imposing banking and transportation restrictions, and the administration, despite all the difficulties and hardships, is seeking solutions to quash their [US] plans,” Shana quoted Jahangiri as saying.
Iran’s oil exports started to drop noticeably in August, and many analysts now expect the sanctions to remove more than 1 million bpd of Iranian oil from the market.
Related: Gas Could Overtake Oil As The Largest U.S. Energy Source This Year
The International Energy Agency (IEA) said in its monthly Oil Market Report on Thursday that due to falling supply from Venezuela and Iran, the market is tightening. It also said that oil prices are set to rise unless there is additional production increases elsewhere that will offset the supply losses.
“Evidence provided by tanker tracking data suggests that Iran’s exports have already fallen significantly but we must wait to see if the 500 kb/d of reductions seen so far will grow,” the IEA said, noting that Iran, Venezuela, and Libya could be the three primary drivers of further oil market tightening that could push Brent Crude prices to above $80 a barrel in the coming weeks and months.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
- Oil Prices Leap Higher After API Reports Huge Crude Draw
- The Qatar-China LNG Deal Is A Game Changer
- China Poised To Dominate South Sudan’s Oil Industry