EMEA News
Lukoil CEO Downplays Iran's Ability to Impact Oil Markets
Following the recent lifting of sanctions against Iran, Lukoil chief executive Vagit Alekperov has downplayed the potential impact that the nation's return to the International oil market could have on crude prices.
With oil markets saturated, and key nations from the Organization of the Petroleum Exporting Countries (OPEC) reiterating as recently as last week they have no intention of changing their high-out market share strategy, Iran maintains it will add 500,000 barrels per day (bpd) to the bloated market almost immediately.
That, the International Monetary Fund (IMF) warned last month, could sink already chronically low oil prices by a further $5 to $15 per barrel.
However Alekperov believes it will take take at least five to seven years before Iran will have any significant impact on the market, and even that time scale would require changes to legislation in order for the country to compete for investment.
"All of Iran's oil producing equipment needs to be modernized, its oil fields require investment... Unfortunately, Iran has not come up with the legislation yet... They need to make a competitive offer," Alekperov was quoted as saying.
With oil prices having spent most of last week under $30 per barrel, Bunker prices have been pushed down to levels not seen in over a decade.
Ship & Bunker data has shown that the oil price collapse has actually pushed HFO prices down further than might have been expected relative to the drop in crude, although MGO prices have got comparatively more expensive.
Alekperov said he expects oil prices to remain around the $30 per barrel mark for the rest of the quarter, but average $50 per barrel for 2016 as a whole.
Last month Ship & Bunker reported that traders believe Venezuela will have difficulty meeting its debt obligations as a result of the oil price collapse, and could default as early as February.
