I am happy that I have carried this huge burden of responsibility on my shoulder for years and I hope to put it down safely, properly and honestly. I asked all OPEC members to support next petroleum minister, he said.

About OPEC meeting, Zangeneh said it was an ordinary meeting of OPEC not an extraordinary one and we mostly focused on some paperwork such as approving financial reports and selecting the auditor. And, most technical reports are due to be presented in OPEC Plus meeting.

The decision on easing oil output cuts or increasing production is to be made in OPEC Plus meeting which will be held in hours, he added.

The OPEC’s decisions are mainly based on reaching consensus, he said, adding oil market condition has not created any differences.

Earlier Zangeneh spoke at the 181st Ordinary Meeting of the Organization of the Petroleum Exporting Countries’ Conference after he received OPEC’s remarks honoring him for his contributions to the organization. In his remarks, he said, “I would like to express my sincere appreciation to our distinguished Secretary-General, HE. Mohammad Barkindo and his able staff for this tasteful and humbling video documentary presentation. I thank you for all the kind words addressed to me.”

He continued, “Allow me to share with you, very briefly, my insight about the underlying reason for the success and durability of our Organization. In my view, OPEC is the only economic organization of the developing countries that directly and significantly impacts and shapes the world economy. OPEC was founded on the pillar of a golden principle. This golden principle was the key for OPEC to achieve unparalleled success in the last 60(sixty) years. Comprehension and acceptance of the need for cooperation within OPEC along with intra economic competition and even political conflict among OPEC member countries constitute that key golden principle.”

He added, “Agreeing to cooperate with one another within OPEC to secure national interests with overarching rule of wisdom in relations among OPEC members, despite tremendous ups and downs and major tensions and discords among member countries is the secret key to durability and success of our Organization in the last 60(sixty) years. In the meantime, we have all scored and benefited from being an OPEC member in the interest of our national development and our own peoples.”

He noted, “At the verge of being 70(seventy) years old, when the new government of President-elect His Excellency, Mr. Raisi, is about to be formed, I have decided to step aside from official public service and go to retirement. I ask all friends here and am confident that the same courtesies and cooperation that was accorded me during these long years will be accorded to my successor who will take office in less than two months from today.”

Meanwhile in a video message, the Organization of the Petroleum Exporting Countries (OPEC) praised Iran’s oil minister for his long presence in Iran’s Ministry of Oil at the 181st Ordinary Meeting of the OPEC Conference on Thursday.

The video message was recorded and played to honor Zangeneh’s final attendance at the OPEC ministerial meetings during the 181st Ordinary Meeting of the OPEC Conference held via videoconferencing on Thursday.

OPEC Secretary-General, Mohammad Sanusi Barkindo, said: “At this historic moment, I would like to take a few minutes of your time to reflect with deep appreciation and a touch of nostalgia on the historical contributions of his Excellency, Bijan Zangeneh of the Islamic Republic of Iran to OPEC during his long and illustrious career.”

“Indeed, we have a debt of gratitude to pay for his many years of dedicated service of excellence to this organization as head of the Islamic Republic of Iran’s delegation to OPEC,” the message reads.

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Iran and other signatories of the 2015 nuclear deal, officially known as the Joint Comprehensive Plan of Action (JCPOA), are currently negotiating the revival of the mentioned pact from which Donald Trump had withdrawn the U.S. in 2018.

The withdrawal of the U.S. from the nuclear deal was the beginning of a new round of sanctions on the Islamic Republic’s oil industry that pushed the country to reduce its oil production levels as its major oil customers pressured by the U.S. refused to continue buying Iranian oil.

According to unofficial data, Iran is currently pumping nearly 2.5 million barrels per day (bpd) of crude oil, while the country’s output was about 3.83 million bpd in mid-2018.

Now, the country is once again getting ready to boost its oil output to the pre-sanction levels to claim its market share seized by other competitors in the region. In this regard numerous production enhancement projects underway across the country have been ordered to accelerate the operations in order to finish the projects earlier than scheduled.

Having confidence on the above-mentioned projects and planning, senior Iranian oil officials, including Minister Bijan Namdar Zanganeh, have repeatedly stressed that NIOC is fully prepared to return to the oil market.

“We can easily reach [an output of] 6.5 million barrels per day,” Zanganeh said at a ceremony to award studies on the country’s giant Azadegan oil field on May 31.

Earlier this month, NIOC’s Deputy Director for Production Affairs Farrokh Alikhani also said: “Precise weekly, monthly and quarterly planning has been made to restore oil production to pre-sanctions level, and if sanctions are lifted, most of the country’s oil production will be restored within a month,”

After the re-imposition of sanctions against the country, NIOC prepared a plan for production control, in parallel, programs for production restoration were also put on the agenda, and plans were made to revive production at one week, one month, and quarterly intervals, Alikhani explained.

As mentioned by the official, NIOC’s plans for restoring production have been set way before the recent developments, and the country has been preparing for a strong return to the oil market as earlier as 2019.

In January 2019, NIOC started a $6.2 billion national program based on which recovery enhancement deals were to be signed with local firms to boost oil production by 355,000 bpd at 33 fields.

The first group of such projects worth $800 million were signed that month to increase the country’s oil production by 75,000 bpd.

A second group including 13 fields was awarded in August 2020 to Iranian companies with a total investment of $1.7 billion, to raise oil output further by 185,000 bpd.

These contracts were inked by two NIOC subsidiaries namely the Iranian Offshore Oil Company (IOOC) and the National Iranian South Oil Company (NISOC), as employers, and 13 domestic companies for the maintenance of the production level and increasing recovery factor of several oil fields.

The third group of deals worth €1.2 billion were also signed between IOOC and NISOC, as employers, and eight Iranian companies for the maintenance of the production level and increasing recovery factor of several other oil fields.

In one of these projects IOOC has implemented a pilot enhanced oil recovery (EOR) project in which a nanofluid has been injected into an oilfield in southern Iran for the first time to boost its recovery factor.

The high-tech project was unveiled in a ceremony attended by officials from IOOC, NIOC, and Iran’s Research Institute of Petroleum Industry (RIPI) in late May.

In this pilot project, 18,000 barrels of nanofluid were injected into one of the wells of Belal oil field in Hormozgan Province.

As the NIOC’s research body, RIPI has been tasked to fully support the local firms that are currently working on the country’s oil fields in order to provide them with the latest knowledge and technologies in the field.

On Monday, the head of RIPI’s Petroleum Engineering Research Department said the institute has been working on the world’s latest EOR techniques to come up with the best possible methods for boosting the output of the country’s oil fields at the shortest possible time.

According to Abbas Shahrabadi, oilfield development and recovery enhancement projects are carried out according to a clear and comprehensive roadmap, and RIPI, like other reputable companies in the world, uses such a roadmap to carry out recovery enhancement projects.

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The resurgent pandemic necessitated “preemptive” action to protect the oil recovery, said the kingdom’s Energy Minister Prince Abdulaziz bin Salman. That ran counter to the view of Saudi’s OPEC+ ally, Russia, but since then plenty of evidence has emerged that Riyadh made the right call.

On Tuesday, the International Energy Agency slashed forecasts for world oil demand in the first quarter as countries hunker down to contain new coronavirus outbreaks. China, which has powered crude’s recovery until now, is locking down cities again and discouraging travel over the Lunar New Year holidays.

“It will take more time for oil demand to recover fully as renewed lockdowns in several countries weigh on fuel sales,” the Paris-based IEA said in its monthly report.

Oil prices have rallied by about 9% since the Organization of Petroleum Exporting Countries and its allies surprised the market on Jan. 5. The 23 nations led by Saudi Arabia and Russia had been expected to add another monthly supply increment of as much as 500,000 barrels a day. Instead, most of the group postponed the return of halted production, and Riyadh said it would make an additional cutback in February and March.

Brent futures climbed above $57 a barrel last week, the highest in almost a year. That’s brought relief to the depleted coffers of OPEC+ members, including Saudi Arabia, which needs prices far above current levels to cover government spending. Oil revenue earned by the cartel slumped 46% to an 18-year low of $323 billion last year, according to the U.S. Energy Information Administration.

Those financial gains don’t come without risks, namely that the Saudis could over-tighten the market. If the rally encourages a flow of new supplies from U.S. drillers and other rivals, the kingdom’s additional cuts would have backfired. A big chunk of shale oil production is profitable at current prices, according to IEA Executive Director Fatih Birol.

Moscow’s support for further output increases was motivated in part by the fear that any supply gap left by OPEC+ cuts would be filled by rivals. It’s why Russian Deputy Prime Minister Alexander Novak tried to dissuade Prince Abdulaziz from making his extra cutback at the January meeting.

So far, evidence from the oil market has validated the kingdom’s preemptive action.

In India, sales of diesel — the country’s most-used fuel and a proxy for economic health — dropped by 6.6% in the first half of January compared with the same period in December, and was down 3.5% from a year earlier, according to people familiar with preliminary data. Sales of gasoline, jet fuel, and liquefied petroleum gas also declined.

In Europe, road use in the U.K., France, Italy, and Spain was down 37% in early January compared with pre-pandemic levels, according to data compiled by Bloomberg. Excluding year-end holidays, that’s the weakest since June.

The erosion of the demand recovery, driven by new lockdowns to control the spread of highly infectious new variant of Covid-19, is reflected in key price indicators. The premium on December 2021 Brent contracts versus those a year hence, which signals tight fundamentals, surged to the highest since 2018 in the days following the OPEC+ meeting but has narrowed 20% in the past week to $1.76 a barrel.

With the additional Saudi curbs, oil inventories are on track to decline steadily in the first half of the year, eliminating much of the surplus that built up during the initial months of the pandemic last year, according to the IEA.

“We all agree that the recovery is fragile,” OPEC Secretary-General Mohammad Barkindo said at a conference on Tuesday. “But we are cautiously optimistic that the recovery will materialize this year.”

The supply shortfall will deepen in the second half of the year as the deployment of vaccines revives economic activity, allowing Saudi Arabia and fellow OPEC+ nations to open the taps. That would herald a turning point for the alliance — the payoff for years of sacrificed sales to prop up the market.

“Much more oil is likely to be required,” the IEA said. If shale drillers remain docile, “OPEC+ may start to reclaim the market share it has steadily lost to the U.S. and others since 2016.”

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IRAN NEWS ECONOMIC DESK

TEHRAN – Stating that the export of 2.3 million barrels is possible, Minister of Oil Bijan Zanganeh said that Iran does not need permission to return to oil markets.

He made the remarks on the sidelines of the opening ceremony of South Pars phase 11 drilling on Monday.

“If there are no sanctions and resources are provided to rehabilitate wells that have been reduced in production, 2.3 million barrels can be exported,” said Zanganeh.

Noting that OPEC has the commitment to maintain prices, he added, “Iran does not need permission to return to the oil market because it considers it as a right.”

Elsewhere in his remarks, he referred to the sanctions, saying, “During the sanctions period, we proved that we will not give up and find another way to prevent the stop of the development of the oil industry through the efforts of our colleagues.”

“Despite U.S. sanctions against Iran’s oil industry, Iran’s oil production has never stopped,” Zanganeh highlighted.

He reiterated that if the sanctions are lifted and resources for revival pf production in some wells whose production has decreased, Iran can export 2.3m bpd.

On the possible candidacy for running president in 2021 election, he said he himself has also heard such a rumor, reiterating that one should not trust whatever he ears.

Zanganeh also warned people over gas consumption, saying that people should stop wasting gas and they should be used according to their needs otherwise they may face restriction.

On the conditions set by foreigners for return to Iran in case of lifting sanctions, he said first the U.S. should return to the JCPOA, then we can talk about this point.

Touching upon developing joint fields, he emphasized that currently, the ministry is focused on developing Balal, Farzad, Kish and South Pars fields in the gas sector and Karoun, Jofeir and Sepehr projects in oil sector.

He also said that the first phase of Phase 14 of South Pars is to come on stream by the yearend.

Zanganeh reiterated that if the South Pars gas field is not developed and the production is not protected, the country will face shortage of gas in two years.

He went on to say that the ministry has called on domestic companies to start development of some gas and oil fields as soon as possible, noting that currently 95 percent of the total population of the country enjoy using gas services.

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According to the documents, the extended oil cartel is considering four possible scenarios for 2021. Two of these are based on following the initial arrangements, including a further relaxation of cuts from 7.7 million bpd to 5.8 million bpd from January.

Under these two scenarios, the drawdown in global oil stockpiles will continue, but the total will remain well above the five-year average. In the milder pandemic effect scenario, oil inventories will be 125 million barrels higher in 2021 than the five-year average, and in the more severe pandemic effect scenario, these will be 470 million higher than the five-year average. This will translate into an excess supply of 1.9 million bpd.

Yet under the tougher production restrictions scenarios, the drawdown will be more significant: if the cuts deal is extended by three months, until the end of March, global inventories will only end up being 73 million barrels higher than the five-year average by the end of 2021. If the cuts are extended until the end of June, the total supply will be just 21 million barrels higher than the five-year average. These figures translate into a daily supply deficit of between 900,000 bpd and 1.4 million bpd.

OPEC+’s meeting from yesterday ended with overall support for extending the production cuts by three months, although some members have appeared willing to resort to even deeper cuts from January to restore balance on oil markets.

The ministerial committee is meeting again today to discuss the four scenarios as oil producers continue to struggle with persistently low oil prices despite the current cuts and despite recent positive updates from the coronavirus vaccine front.

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Iraq, the United Arab Emirates (UAE), and Kuwait – the biggest OPEC producers behind Saudi Arabia – are reportedly not particularly inclined to support a rollover of the cuts of 7.7 million barrels per day (bpd), because such cuts are too deep for their economies and budget incomes to sustain. This news came from Reuters on Thursday, quoting sources in OPEC and the industry.

“OPEC Members Rebel Over Production Cut Extension”

Sources in OPEC told Reuters that the two leaders of the OPEC+ pact, Saudi Arabia and Russia, would be inclined to favor rolling over the cuts of 7.7 million bpd in 2021, instead of easing them by 2 million bpd as set in the current OPEC+ production agreement.

OPEC and its Russia-led partners will likely consider “a lot of demand issues” before tapering their cuts, a senior executive at Saudi Aramco said this week, while Russian President Vladimir Putin said last week that he is not ruling out OPEC+ delaying the easing of the cuts, or even making further reductions.

However, the UAE and Kuwait – which have typically followed Saudi Arabia’s lead when it comes to agreements and compliance with the cuts – as well as Iraq, are reportedly unwilling to back a rollover of the deep cuts.

“The countries are being suffocated with those cuts, it is very tough to continue with them next year too,” an OPEC source told Reuters.

“OPEC Members Rebel Over Production Cut Extension”

The reported unwillingness of OPEC’s three largest producers behind Saudi Arabia to agree to keep the deep cuts could become a source of renewed tension in the cartel and the larger OPEC+ group, and create new drama when the alliance meets later this year to set the course for 2021.

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It is an intergovernmental organization of 13 nations founded in 1960 in Baghdad by the first five members (Iran, Iraq, Kuwait, Saudi Arabia and Venezuela) and headquartered since 1965 in Vienna, Austria. In 2019, OPEC accounted for 42.0 percent of global oil production and 71.8 percent of the world’s proven oil reserves, giving it a major influence over the global oil market and prices that were previously controlled by the so-called “Seven Sisters” cartel of the world’s largest multinational oil companies. ¹

The stated mission of the organization is to “coordinate and unify the oil policies of its member countries and ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply of oil to consumers, a steady income to producers, and a fair return on capital for those investing in the oil industry. ² The organization is also a significant provider of information about the international oil market. The current OPEC members are Algeria, Angola, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, the Republic of Congo, Saudi Arabia, the UAE and Venezuela.

The formation of OPEC marked a turning point toward national sovereignty over natural resources and OPEC decisions have come to play a prominent role in the global oil market and international relations. The effect can be particularly strong when wars or civil disorders lead to extended disruptions of supply. In the 1970s, restrictions in oil production led to a dramatic rise in oil prices and in the revenue and wealth of OPEC with long-lasting and far-reaching consequences for the global economy. In the 1980s, OPEC began setting production quotas for its member nations; generally, when the quotas are reduced, oil prices increase. This has occurred most recently from the organization’s 2008, 2016 and 2020 decisions to trim oversupply.

The OPEC Reference Basket of Crudes has been an important benchmark for oil prices since 2000.

How influential is OPEC?

The influence of OPEC has closely followed the peaks and valleys of the world’s demand for oil.

However, the greatest challenge OPEC has so far faced in its history was the COVID-19 pandemic, an event which will go into history as the most destructive event that has hit the global economy in almost a century.  Indeed its impact is already far bigger than those of both the financial crisis of 2008-9 and the 2014 oil price crash. ³ There are indications that its adverse impact could be even bigger than that of the 1929 Great Depression.

Today, economists and analysts debate about how influential OPEC is. Conventional wisdom holds that OPEC has the world in its grasp. It can manipulate prices by tinkering with supplies. But the conventional wisdom is mostly wrong. For the most part, its actions lagged behind fundamental changes in oil supply and demand rather than leading them. OPEC looks like a masterful cartel when, in fact, it is mainly just riding the waves.

Decision-making inside OPEC is quite complicated most of the time. This is because the policies of its de facto leader Saudi Arabia sometimes differ radically from those of other OPEC members’ in relation to prices and supplies.

Three times since the early 1980s, Saudi Arabia has singlehandedly and unsuccessfully taken decisions which diverged from the interests of OPEC.

Early in the 1980s, Sheikh Ahmad Zaki Yamani, the veteran former oil minister of Saudi Arabia, suddenly awoke to Saudi Arabia’s need for market share. He flooded the market with oil causing the oil price to collapse to $10 per barrel. It later transpired that the Saudi need for a market share was just a cover for a CIA-Saudi conspiracy to expedite the downfall of the former Soviet Union with the Reagan administration starting a costly arms race and Saudi Arabia depressing oil prices by flooding the market. Saudi Arabia ended bankrupting itself in the service of the United States. ⁴

In the aftermath of the 2014 crude oil price crash, the oil price lost 54 percent of its value and there were no indications that it will stop there in the absence of a major production cut by OPEC. At one point the price fell to $30.

Instead of agreeing to production cuts with OPEC, Saudi Arabia ignored OPEC and flooded the global oil market with oil. Circumstantial evidence suggested some political collusion between Saudi Arabia and the United States behind the steep decline in oil prices aimed against Iran and Russia.

Saudi Arabia was forced to eventually discard its strategy and engineer with Russia an OPEC/non-OPEC production cut agreement whereby OPEC and Russia cut production in support of oil prices effective as of January 1, 2017. As a result, prices have recovered from $40 a barrel to almost $80. The agreement has since been extended to the end of 2018 with talks going on about converting it into a permanent mechanism for cooperation between OPEC and Russia in what has been dubbed as OPEC+.

And with prices falling by more than 50 percent as a result of the COVID-19 pandemic since hitting £60 in January, OPEC+ met on March 6 and 7 to discuss new production cuts or deepening existing ones. Saudi Arabia called for deeper cuts amounting to 1.5 million barrels a day (mbd).

Russia refused to agree to deeper cuts arguing that OPEC’s proposal for cuts of between 600,000 barrels a day (b/d) and 1.5 mbd would have been ‘a drop in the ocean’ in a market where oil demand is plunging fast. Considering that oil demand was already down by 15 mbd and could reach 20 mbd in coming weeks, influencing the market with the cuts proposed by Saudi-led OPEC would have been impossible. ⁵

Russia’s refusal was the last straw for Saudi Arabia so it decided rashly to wage a price war against Russia and flood the global oil market with oil. This exacerbated the destruction of global oil demand leading to prices sinking below $20 a barrel.

Anti-OPEC bill could be a game-changer for oil markets

In its effort to wrest more control over global oil markets away from foreign producers, the US Congress has been pushing a bill that would let the US sue OPEC for an alleged oil price fixing. The bill called ‘No Oil Producing and Exporting Cartels Act’, or ‘NOPEC’, was first introduced in May 2018. ⁶

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World economy in the energy sector has a momentary look at the oil market and it actually knows it is impossible to stop this look in the short time. The Middle East and Asia are the center stage of reflection of this view as the U.S. sanctions on Venezuela have not been enough effective.Despite the U.S. unilateral sanctions against Venezuela, China shipped significant amount of crude oil to Venezuela in delicate ways in 2019. Before that, most of crude oil in Venezuela was produced by the American companies and it was bought by the American refineries.

IRAN NEWS POLITICAL DESK

In the first half of 2019, China imported 350,000 bpd of crude on average from Venezuela. With repeated threats of the U.S., the amount of crude extraction of oil in Venezuela by Chinese company CNPC gradually dropped and it was almost zeroed in the second half of 2019. But the international section of Rosneft Company, which has been registered in Switzerland, buys Venezuela’s crude oil and ships it to areas near China. Malaysia has been determined as the destination for shipment of Venezuela’s oil which is later taken to Shanghai Port in China. Some 48m tons of crude was taken to China through this method in May, 2020, which shows 20 percent growth comparing to the same period in 2019.

The Chinese companies have stepped up imports of crude by taking advantage from rift among the OPEC member states, the rise in oil production by Saudi Arabia and the slump in the oil price. When we glance at the reports on transportation, we learn that the fare for shipping crude between the Persian Gulf ports and Chinese ports and chartering an oil tanker has jumped from average $33,500 on March 6, 2020, to 285,000 in the following week and it indicates changes in the growth of transportation cost in the market. These reports also show that Saudi Arabia’s share from the global oil market has become more in these days.

While investment in developing and exploring the oil fields is declining day by day in the wake of Coronavirus pandemic and oil price is slumping, Saudi Arabia has enhanced its production capacity to have major share of the market. According to the American investment bank JP Morgan’s report and despite slump in the oil prices in recent months, it is predicted the price of Brent oil to bounce back and to reach $60 per barrel. The Brent oil price was once $16 per barrel in April. The bank’s report predicts that the demand for oil would not exceed 91m barrel per day in 2020. This amount for demand for 2020 is almost 9 to 10 million barrels lower than other scenarios which had been predicted by the other energy studies think-tanks. It is predicted the oil demand in 2021 to return to its previous level of 100m bpd.

At the same time, slump in investment in energy sector, which will at least decrease by $625b according to the bank’s experts as well as closure of some oil fields in different parts of the world, will cause the decline in demand for almost 5m barrels of oil between 2020 and 2025.

So those areas, where oil is produced with cheaper cost or investment costs are cheaper there, can compete to dominate the market. On the oil shale and its expensive production cost comparing to the conventional oil, JP Morgan predicts its production to rise from 10.9m bpd in 2020 to 11m in 2030.

Before the Coronavirus pandemic, some scenarios predicted that oil shale production would hit 17m bpd in 2030 but due to the current condition in the U.S., it is unlikely to happen. So the OPEC members can take advantage of this gap and increase their productions and their shares from the market in order to minimize their budget deficits.

In this condition, Iran will have the lowest share of oil sales in 2020 ,and of course, new Majlis and economic resistance policies consider this trend of cutting dependence on sales of crude oil as useful for the national economy.

 By: Hamid Reza Naghashian

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During those days that the Coronavirus pandemic had spread wave of fear and concerns worldwide, there was such a recession dominating the oil market that surprised the world. This recession was so that the U.S. was ready to pay $35 per barrel to those who were ready to buy its oil in order to save extractions from its oil wells. Now after two months of fight with main rival of economy, the Coronavirus, while some group supporting the fight with the virus and some group defending reopening of economy through observing social distancing, the oil price is getting upward trend.

IRAN NEWS POLITICAL DESK

Oil price despite uncertainties from the virus is growing but it has also experienced swings resulted from the condition in the market. Early this week, the crude benchmark Brent , with seven percent growth, inched towards $43 per barrel and the price of the U.S. West Texas intermediate crude reached $40 per barrel. This change in the nature of the market’s approach has important reasons that some reason can be like strengthening of the demand which had suffered serious damage after the outbreak of COVID-19.

Most experts believe that devastating effects of COVID-19 on the U.S. economy are going downward. The murder of George Floyd and following protests  have still overshadowed the U.S. community, and employment market in the U.S. is changing. The U.S. unemployment rate while was 14.7 percent in April improved in May and reached 13.3 percent. This is while the number of total unemployed population in the U.S. is estimated at 40m people. On the other hand, statistics show that demand for oil, which had faced heavy decline this year and especially it was 21m barrels lower in April comparing to the preceding year, is gradually improving. Consumption of oil products is on the rise. The demand for gasoline in some countries like China, the U.S. and Europe is increasing. The fuel jet price is soaring with slower pace because of restrictions imposed on passenger plane flights in countries. These data are reported while measurement of greenhouse gases shows that the amount of carbon dioxide emission in Earth’s atmosphere has increased comparing to the preceding year. The CO2 levels reached a record high in May which were an average of just over 417 parts per million, or ppm, which grew by 2.5 ppm.

This rise in CO2 levels is very significant and considerable when most of industrial activities and transportations in the world had almost being halted due to the Coronavirus crisis. Experts in the environmental issues believe that CO2 has a capability which can keep its emission in the atmosphere for hundreds of years; so by 17 percent drop in consumption of fossil fuels in April, one cannot expect reduction in the greenhouse gases.

Regarding the improvement in data related to oil sales and comparative balance in prices, condition of Iran’s oil production and exports are still unknown. Some data from think-tanks and secretariats of energy institutes estimate that Iran has continued exporting between 80,000 to 800,000 barrels of oil per day.  Before the U.S. pullout from the JCPOA, Iran used to export 2.5 bpd of crude oil. Customers of Iran’s oil are currently China, India, Turkey and some unknown purchasers in the spot market.

On sales to China, the latest report from China’s General Administration of Customs shows that the country imported 350,000 bpd of Iran’s oil in March. What one can definitely say today and in the economic chaos in the world is that the connection of global markets to each other will have overlapping effect, either positive or negative, in the markets, and in the upcoming months it will be totally unpredictable.Can the U.S. be able to improve the economy and push the production towards a comparative stability through its suppressing method during the protests on the racism? Will effects of lockdown in important sectors of Europe’s economy can be rebuilt? The International Monetary Fund (IMF) in response to these questions predicts a negative economic growth for the world between 2.5 to 7 percent and this is the indicator for a gloomy outlook, even if today the oil market moves towards the temporary target of interaction.

 By: Hamid Reza Naghashian

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