President Donald Trump withdrew from the 2015 nuclear deal and reimposed sanctions. Iran's oil exports, the government's main source of income, plummeted from a peak of 2.8 million bpd in 2018 to as low as 200,000 bpd after U.S. Iran sits on the world's fourth-largest oil reserves and relies heavily on oil revenues.
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Kpler and energy consultancy FGE estimate that if a nuclear deal is reached in early March and sanctions are lifted in the direct aftermath, the boost to exports would mostly be seen from May and June.Įhsan Khoman, analyst at MUFG Bank, also expects at least two to three months for verification of Iran's compliance, followed by another month for diplomatic adoption of the deal and its implementation.Ī European trading source said, however, that the process might be faster than 2015 "as there is impetus due to the crisis in Ukraine" and disruptions to Russian oil exports. "This is about 20 million barrels as of now, and at least another additional 50 million barrels of stored liquid is available for immediate export," she said. Iran has also moved some of its floating stocks of condensate from anchorage to its oil terminal on Kharg Island, in anticipation of imminent export, Sara Vakhshouri, president of SVB Energy International, said. Their location seems to indicate they are waiting to discharge in the coming days or weeks," said Homayoun Falakshahi, a senior analyst at Kpler. "We have seen a notable jump in Iranian oil held in floating storage in Chinese waters, from 7.8 million barrels in early January to 14 million barrels now. Still, Iran's crude in floating storage could hit the market quickly and Tehran has been moving it into place, analysts said. Iran is expected to ramp up its output following a deal too but analysts warn it could take three to six months to raise exports by 1 million to 1.3 million bpd - with further increases in production taking years and depending on major investment in ageing oil infrastructure. Most refiners around the world have also shunned Iranian oil for several years and they would need two to three months to finalise technical arrangements to enable imports from Iran to resume, analysts said.Īs and when Iran's compliance with any deal is certified, however, it would not need to wait to boost output from oilfields to export more as it could release crude in storage and help offset some of the pressure on oil prices caused by the slowdown in Russian supplies due to sanctions on Moscow.ĭata firm Kpler estimates that Iran had 100 million barrels in floating storage as of mid-February, meaning it could add 1 million barrels per day (bpd), or 1% of global supply, for about three months, but that would only be a short-lived boost.
When the first deal between major world powers and Tehran was signed in 2015, for example, sanctions were only fully lifted six months later, once Iran's nuclear-related measures had been verified by the U.N.'s watchdog.
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