Qamsari said the oil market is now oversupplied by 2.5 million to 3 million barrels a day, which have sent prices into a tailspin, with Iranian crude now averaging in the $20-30 range.
The prospect of more regional conflict in the Middle East has caused the oil price to rise steadily since the New Year, when Saudi Arabia executed 47 people on January 1, reported German Economic News (DWN) on Monday.
NIOC Managing Director Roknodin Javadi has also pointed to the reached agreements with the United Kingdom and France to begin importing Iran’s oil; “oil sale to Britain and France will get resumed as soon as the sanctions are lifted”. US crude’s West Texas Intermediate (WTI) futures were up 29 cents at $37.33.
Oil is more than a third cheaper at the start of this year than last, with the price of a barrel of Brent crude, the global benchmark, having fallen to $37.28 (£25.50) from $57.33 a year ago.
On Monday, data provider Genscape Inc. told clients that crude-oil stockpiles in the key storage hub of Cushing, Okla., rose in the week ended Friday, according to a broker who viewed the data. But early price gains were reined in by concerns over Asia’s slowing economies as China’s main stock markets tumbled 7 percent and trading had to be suspended.
The diplomatic row between these two countries escalated following the execution of a prominent Shi’ite cleric by Riyadh two days earlier. Saudi Arabia and several of its allies have severed or downgraded diplomatic ties with Iran. Both members of the Organization of Petroleum Exporting Countries, the two governments have been at odds over oil production levels during the market downturn. Iran produced 2.9 million barrels a day of crude that month.
ABN Amro had the highest 2016 forecast for Brent at $65 a barrel, while Nomisma Energia had the lowest at $38.08.
Economists at private equity giant, the Carlyle Group, pin much of the unexpected weakness in 2015 global growth on declining capital expenditure spend as a result of falling commodity prices.
The heightened tensions with Saudi Arabia could encourage Iran to accelerate its production increases, analysts said. “I think President (Hassan) Rouhani on the Iranian side would like to calm things down and push for no further escalation”, Energy Aspects analyst Richard Mallinson said.
Iran expects to increase oil exports by half a million to one million barrels per day (bpd) following the lifting of sanctions against the country.
Gasoline futures recently gained 1.2% to $1.2859 a gallon.