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Iran to join competition for oil supply

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By Aygun Badalova


After the removal of the West’s sanctions from Iran, in particular the oil embargo, the country will become a full-fledged player in the market and will join the competition in supplying oil, Vladimir Sotnikov, the senior fellow at the International Security Center of the World Economy and International Relations Institute told Trend April 29.

“Once the oil embargo gets removed from Iran, the country, which is in fierce competition for regional leadership with Saudi Arabia, will now join the competition in terms of oil supplies,” said Sotnikov, who is also the senior fellow at the Middle East Department of the Russian Sciences Academy’s Oriental Studies Institute.

The expert believes that the final agreement between Tehran and the six international mediators on Iran’s nuclear program will eventually be signed, since both parties have an interest in this.

“However, the issue of lifting the sanctions is not so simple,” said Sotnikov. “Iran’s position on this issue is quite tough.”

“The Iranians insist that the sanctions be lifted immediately, that is, immediately after the signing of a final agreement on the nuclear program,” he added.

However, as the expert said, the question is how ready Washington is to take such a step.

Sotnikov said the US President Barack Obama is now seeing serious pressure from both Republicans, and from Congress.

“Obama may fear that Congress will not approve the purely American sanctions, which the US imposed on Iran, including the oil supply embargo,” the expert said.

He believes that the sanctions imposed on Iran will be lifted in stages.

Following the lifting of sanctions, Iran will start increasing oil production, however, it will not be able to do it quickly, according to the expert.

There is no point to expecting an increase in Iran’s oil production before 2016, he added.

Talking about the further dynamics of changes in oil prices in the world market, the expert said that the price of North Sea Brent crude will be $50-$65 per barrel in the near future.

Nevertheless, the expert didn’t rule the possibility of increase in oil prices to $100 per barrel in a short time.

Recently, Iranian President Hassan Rouhani said that the sanctions imposed on Iran would be lifted in the coming months. He added that the comprehensive nuclear deal with P5+1 would be signed in the coming months if the other side in the negotiations is ready for this.

The P5+1 and Iran reached a political agreement on Iran’s nuclear program on April 2. The preparation of the agreement should be completed by June 30. If Iran complies with the paragraphs of the agreement, the economic sanctions imposed on it will be relieved.

Earlier, Iranian authorities said that following the lifting of sanctions, the country will increase the oil production to 4 million barrels per day in three months.

Under the sanctions, Iran’s oil export dropped to 1.1 million barrels per day, compared to 2.2 million barrels per day (till 2012). Currently, the country sells oil to China, India, South Korea, Taiwan and Turkey.