Iran Says Its Missing Barrels Cannot Be Compensated

TEHRAN — Iran says no country can ever compensate for its missing oil supplies to markets in case the US materializes its threat to bring the Islamic Republic’s oil exports to zero with a top official saying that US President Donald Trump would sooner or later have a change of heart over his campaign to the same effect.

Hossein Kazempour Ardebili, Iran’s ambassador to the Organization of the Petroleum Exporting Countries (OPEC), said none of the current major producers including Saudi Arabia and Russia had the technical capability to fill the gap that would be created as a result of a potential halt in Iran’s oil exports.

This, Kazempour Ardebili emphasized, would make US threats against Iran’s oil exports – that he said stood at around 2.3 million barrels per day (m/bpd) – already impossible.

“By considering the current market conditions and the production levels of OPEC and non-OPEC producers, threats to cut off Iran’s supplies from markets appear nothing but impractical,” he told Iran’s IRNA state news agency.

“The conditions of the market and the production status of oil producers are not as such to allow finding an easy replacement for Iran’s oil and remove it from oil markets.”

Iran has welcomed OPEC’s refusal to raise oil output as demanded by US President Donald Trump, saying US dream to stop Iranian oil exports would not come true.

Kazempour Ardebili said Saudi Arabia had previously announced that it would make up for the missing Iranian oil barrels, stressing that the kingdom had not yet increased its output nor tapped into its strategic reserves to show that it could actually do what it had promised to do.

He added that Russia had not much extra oil left to supply to markets to compensate for a possible halt in Iran’s exports once the US sanctions came into effect. This, the official added, would not change given that Russia’s production would decline over the cold months of the year.

Iran says US President Donald Trump’s anticipation that certain oil producers can fill the market gap created as a result of cutting off Iranian supplies is based on a “miscalculation”.

Kazempour Ardebili said the unfavorable conditions for the implementation of US oil sanctions against Iran could eventually force US President Trump to show a certain level of flexibility.

“Trump would have to show a certain level of flexibility toward the clients of Iran’s oil,” he said. “For example, he could allow Iran to export 1.2 to 1.5 m/bpd. By considering the current conditions, he will have to back down on his plan to bring Iran’s oil exports to zero.”

The official further said the US could tap into its own strategic reserves to compensate for the missing Iranian oil volumes. That, he added, would be only a temporary solution.

‘Prices to surge’

Elsewhere in his remarks, Kazempour Ardebili warned that sanctions against Iran’s oil exports could push up oil prices but did not provide a clear estimate. 

He warned that the international community would eventually hold the US responsible for the consequences that this could cause.

He further said all producers – OPEC and non-OPEC – wanted to keep the price of oil at around $80 per barrel. 

Kazempour Ardebili added that producers could nonetheless increase their production to see the prices slightly decline below $80 per barrel in order to appease Washington in its sanctions push against Iran.

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