Ex-OPEC governor: No sufficient replacement for Iran’s oil, sanctions spike prices to unacceptable levels

FNA – Iran’s former OPEC Governor Mohammad Ali Khatibi questioned the feasibility of certain countries’ claims to fill the gap resulted from the US sanctions on Iran’s crude supplies, adding that the US hawkish policies would send the market to skyrocketing prices avoided by buyers.

“The UAE, Kuwait and Russia have declared increase in production to a total surplus of nearly 400,000 barrels, while Iran supplies nearly 2.8mln barrels of oil and gas condensates to the market,” Khatibi said on Monday.

Saudi Arabia may also at most boost production up to 1mln barrels, he added.

“We should also give attention to this fact that seasonal demand rises in fall and winter and this can affect the prices and increase it to $100, in addition to (the impact of) sanctions on Iran,” Khatibi said.

He said seasonal demand and loss of supplies in the market would result in jittery prices that might not be tolerated by buyers, a trend that would leave no chance for the success of US sanctions on Iran’s oil.

While Trump claims that the Saudis have agreed with keeping low the oil prices by increasing their output but given the deficiencies resulting from low production of oil in Venezuela and Libya and contradictory reports that Riyadh does not enjoy enough capability to fill the gap of Iran’s crude, this option seems impossible. Also, given the fact that the world economic growth has reached 4% in the current year, this will increase demand for oil unless the US increases its oil production.

Both Turkey and China have underlined their defiance of the US energy sanctions on Iran as they hate to see their economic growth slow down only to meet Washington’s demands. Then, there is only India left in here to make a crucial decision.