SOCAR Says Iran’s Return Did Not Shake Oil Market

SOCAR Says Iran’s Return Did Not Shake Oil MarketSOCAR Says Iran’s Return Did Not Shake Oil Market

Iran’s return has not changed the alignment of forces on the global oil market, says the chief executive officer of SOCAR Trading SA, the marketing arm of Azerbaijan’s state oil company SOCAR, Arzu Azimov in an interview with Bloomberg.

Azimov said that such fears are always exaggerated.

The market has absorbed additional volumes from Iran against the decline in offers from producers such as Libya, Venezuela and Nigeria.

The share of Iranian oil on the European market is not considerable due to logistical difficulties, according to Bloomberg.

Iran is not yet able to regain access to the Suez-Mediterranean pipeline, an oil pipeline in Egypt running from the Ain Sukhna Terminal on the Gulf of Suez to Sidi Kerir Terminal in Egypt's northern city of Alexandria on the Mediterranean Sea.

Oil companies of the Middle East can transport larger amount of oil to the Mediterranean region via SUMED pipeline rather than the Suez Canal.

A majority of international sanctions against Iran were lifted in January 2016. Tehran plans to increase oil export to regain its market share that was lost due to the sanctions. Currently, the country produces around 3.8 million barrels of oil per day and exports more than two million barrels a day.

Azimov noted that oil prices are unlikely to fall below $40 per barrel until late 2016.

It can lead to the fact that wells in the US will be closed, reducing the total supply volume in the market, said Azimov, adding that the growth of oil prices over $50 per barrel until late 2016 is also unlikely because Brexit has cooled the ardor of “oil bulls.”