Iran shaping up as a potential gas play

BP says Iran has emerged as the largest holder of conventional gas reserves, overtaking Russia - though it hasn't exploited its reserves extensively. This is about to change.

Published Wed, Apr 15, 2015 · 09:50 PM

Oil prices

THERE has been a gush of comments on an increased oil supply from Iran, with Teheran agreeing to rein in its nuclear ambitions. Its "framework" pact with six world powers may be completed by June, and the sanctions gradually withdrawn thereafter.

Iran has often said it will step up oil supply quickly; the process may begin with selling millions of barrels of oil stored in tanks, restoring exports to levels seen in 2010 before the sanctions were tightened. Teheran further intends to double oil production in a few years.

Analysts are generally bracing themselves for a renewed weakening in oil prices, with up to a million barrels of supply flowing into a glutted market sooner. However, that one per cent more supply should not wreck the market if demand improves or if the Organisation of Petroleum Exporting Countries (Opec) abandons its market share strategy with shale-oil output beginning to fall.