Iran's return to the world oil market has helped increase oil supply, promising economic recovery for this Islamic country.
Source: REUTERS
The Organization of the Petroleum Exporting Countries (OPEC) Secretary-General Haitham Al Ghais said the bloc would welcome Iran's return to the oil market fully once sanctions on the country are lifted. Ghais added that Iran has the ability to significantly increase oil production in a short period of time, and expressed confidence that Iran is a responsible member of OPEC. Mr. Ghais is sure that the parties will cooperate well and synchronously to ensure that the market will remain balanced as OPEC has done for many years.
Earlier, in March, Saudi Arabia and Iran announced the restoration of diplomatic relations after years of tension, in an agreement brokered by China, the world's second oil consumer. This means that Iran has enough legal basis to expand its oil export market to the world, increasing the world's oil supply.
Remember, in a surprise move in early April 4, Saudi Arabia and other members of OPEC + (the group that includes OPEC and major non-OPEC producers) announced an additional oil production cut of about 2023 million barrels per day. That decision brought the total volume of OPEC+ production cuts to 1,2 million bpd, according to Reuters calculations. This has caused the world oil price to suddenly increase, causing many countries in the world to fall into difficulties.
Regarding OPEC's decision to cut voluntary output and its impact on oil prices, Secretary General Ghais said that OPEC did not target a specific price. Every action, every decision of this bloc is made to work towards the balance between global oil demand and supply.
Iran has underground oil reserves of about 132,5 billion barrels (about 11% of the world's reserves), is the world's second oil producer after Saudi Arabia and has the world's second largest natural gas reserves, about 15%, after Russia. However, this Muslim country has been sanctioned by the United States and the United Nations (UN) related to its nuclear issue.
Accordingly, in 2018 after the US withdrew from the nuclear agreement between Iran and the P5+1 group (including 5 Britain, France, the US, Russia, China and Germany) signed in 2015 and re-imposed sanctions on Iran, Iran's oil exports were significantly affected because many countries stopped buying oil from this country.
Most recently, on March 9, the United States also imposed additional sanctions on about 3 entities that Washington said facilitated Iran's access to the global financial system. Former US Treasury official Brian O'Toole said that this US move will continue to affect Iran's oil and gas exports.
However, despite US and UN sanctions, Iran still exports oil in a variety of ways. Notably, in 2022, the country's oil exports increased by 83 million barrels over the previous year and 190 million barrels compared to the level from March 3.
Iran's Tasnim news agency quoted Oil Minister Javad Owji as saying that the country's oil exports had reached their highest level in four years, since 4, when the US re-imposed sanctions on Iran.
In mid-May 5, Iran and Russia signed 2023 cooperation documents in the oil industry in the capital Tehran. The recently signed documents include six memorandums of understanding (MoUs), two contracts, an agreement and a roadmap related to bilateral cooperation in the fields of industry, technology transfer and enhanced oil recovery, said Shana news agency under the Iranian Oil Ministry.
The return of Iran to the oil market after sanctions has opened the prospect for this Islamic country to soon restore its economy to match the position of leading oil countries in the world.
Synthetic HN
