Iran will use the
capabilities of Kazakhstan and will work through it with Russia and China,
Iran’s Ambassador to Kazakhstan Mojtaba Damirchiloo told a press conference in
Astana.
The European Union and the
United States have recently confirmed the lifting of the economic and financial
sanctions from Iran that had been imposed in connection with its nuclear
programme. Tehran was waiting for that to happen for a long time and was
getting ready for it.
The next day after all
world media had announced the lifting of the sanctions, Iran’s Ambassador to
Kazakhstan called a big press conference in Astana. His first announcement was
about Iran’s plans to achieve the pre-sanction level of oil production.
“During the sanctions, as
you know, certain limitations were imposed on export of Iran’s oil. Prior to
the sanctions, Iran produced up to 4 million barrels a day, out of which it
exported about 2.1 million barrels. The sanctions reduced the export volumes by
more than a half, to just 1 million barrels a day. Now, Iran intends to return
to the pre-sanction volumes,” Damirchiloo said.
According to him, the
highest level of production in Iran was recorded in 1978. At that time, the
country was producing 6 million barrels a day. The ambassador also said that
Tehran’s ambition was to achieve 4 million barrels a day within a year, and to
export over 2 million barrels a day.
The diplomat made no secret
that Iran intended to return to the previous markets, which were closed for its
oil during the sanctions.
However, many experts are
sounding the alarm in connection with the lifting of the Iran sanctions and its
return to the oil markets. They are concerned that the export of Iranian oil
will add fuel to the flames and will collapse oil prices even further.
Against the background of
these oversupply fears, Brent oil fell below the lowest level since 2003 –
under $28 per barrel – at the start of the trade on January 18. But it only
fell by $1, from $29 to $28, which is a negligible change in the opinion of the
specialists. Moreover, the Iranian oilers are not afraid of the current drop of
the oil prices.
“The cost of oil in Iran is
much less compared to the other countries. For us, the price of 28 dollars per
barrel is viable and quite profitable,” Damirchiloo said
He added that the oil
prices had started falling long before the Iran situation, so Iran was not
exactly to be blamed for that.
“Cheap” oil is not just in
Iran, but also in Saudi Arabia and in Russia. And the problem is rather the
gradual disappearance of the expensive oil from the markets.
According to many experts,
the competition will not be so much among Saudi Arabia, Russia and Iran, but
rather among the higher cost producers. They include, for example, Norway,
which has effectively left the market, as well as Azerbaijan, and, to some
extent, Kazakhstan, Nigeria, and Venezuela. This is also partly applies to
Brazil.
The experts believe that
the key factor causing the fall of the oil prices is the situation in China.
After 2008, it was China that was effectively the main driver for setting the
energy prices and for the world economy on the whole. So the question now is
what is Beijing up to?
That is why, with the
sanctions lifted, Iran intends to expand its cooperation with Central Asia,
Kazakhstan in particular, to strengthen its cooperation with China.
Damirchiloo, believes that
the relations of Astana and Tehran may reach the level of cooperation.
“For example, Kazakhstan
could use the territory of Iran to transport its goods. That is why I pointed
out that these countries are connected by railway, which makes cooperation
easier. Iran could also use Kazakhstan’s capabilities and work through it with
Russia and China,” Damirchiloo said.
In March this year, OPEC is
scheduled to hold an emergency session, which may decide to tighten the quotes
for oil production to maintain the world oil prices.
It is quite possible that
Iran will be part of that process, as that country still needs high energy
prices in spite of the growing volumes of production.
http://neurope.eu/article/iran-to-boost-ties-with-russia-kazakhstan-china/