Lifting of sanctions on Iranian crude oil exports could send oil prices plummeting to as low as $20 a barrel, a new report by The Telegraph has said.
Iran, which holds 9% of the world’s proven oil reserves, currently produces around 2.7m barrels of oil per day, of which 1mn bpd it exports under the terms of the Western sanctions.
However, should sanctions be lifted, the country could significantly ramp up production and add to its existing 2mn bpd oversupply on the market, which some believe could cause prices to fall further.
The Islamic republic could easily increase production by 1m barrels per day (bpd) within months of sanctions being lifted, the oil minister Bijan Namdar Zangeneh said recently.
Furthermore, estimates suggest that the country has between 7mn and 35mn barrels of crude in storage that could be immediately put on the market.
In 2011 the country it a production capacity of over 4mn bpd, according to data from BP.
The deadline for a deal with Iran expires on the 1st of April with the P5+ 1 talks starting in Switzerland this weekend.
