Iran’s election results reduce expectations for its quick return to the oil markets

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Sarah Vakhshouri, head of oil-related strategic consultancy SVB Energy International, confirmed that the election results in Iran have lowered expectations of its return to the global oil market.
She said in statements yesterday that Iran will continue talks aimed at reviving its nuclear agreement during the coming period before the new government takes office, but indicated that the election of a governor to the post of president reduces expectations of a quick Iranian return to the global oil market.
Ibrahim Raisi won the Iranian presidential elections that took place on Friday, and is scheduled to take office in August, succeeding the government of outgoing President Hassan Rouhani, whose government reached the nuclear agreement with world powers in 2015.
And the “Bloomberg” news agency quoted Vakhshouri as saying that the high demand and the continued imposition of restrictions on production by the “OPEC +” alliance and shale oil producers in the United States means that the markets will witness a deficit of up to 1.5 million barrels per day by the end of the year.
On the possible timing of an increase in crude exports from Iran, Vakhshouri explained, “Demand will absorb the return of Iranian oil to the market if this happens in the second half or the last quarter of 2021.”
It added that it would be unlikely that US and European companies would seek long-term contracts and work in Iran’s oil industry, given the prospects of continuing uncertainty about sanctions. At the same time, the new Iranian administration is likely to prefer to continue selling oil to China in exchange for investments.





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