With sanctions being lifted slowly after the passage of a historic nuclear deal between Iran and several Western powers in July 2015, the Middle Eastern nation has looked to stage a return to the oil market, an Iranian energy leader said, reported the Wall Street Journal Sunday. Iran will continue to face obstacles in the oil market, however, including restrictions on exports and banking limitations.
“Currently, we are studying problems faced by domestic banks to this end," said Rokneddin Javadi, chief of the state-owned National Iranian Oil Co., the Journal reported. "Once they are resolved, production and overseas sales of crude will increase,” he said.
The nuclear deal agreed upon in July exchanged the lifting of sanctions against the country for an agreement to give up 99 percent of its enriched uranium and allow for close nuclear monitoring. After the signing of the deal, sanctions weren’t lifted overnight. The process has been slow, and Javadi said it may be another nine months before Iran makes an international oil deal.
Economic sanctions were lifted Saturday after an international watchdog confirmed that Iran had complied with the terms of the deal. Iran also still faces sanctions unrelated to the nuclear pact, including a U.S. embargo on the purchase of Iranian oil.
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Iran's return to production came amid a worldwide oil glut. Exceptionally good production in the Middle East, coupled with the shale boom in the U.S., have put supply very high while demand from emerging markets has shrunk. The supply and demand imbalance has pushed the price per barrel to 12-year lows, plunging to $30 per barrel in early January.
“It’s the most inopportune time for Iran to re-enter the oil market,” Brenda Shaffer, an energy expert at the Atlantic Council, a Washington-based think tank, told International Business Times Thursday. “Iran is in a real catch-22, because they’re going to want to export as much oil as possible the second sanctions are removed, but the more they export, the more prices are going to go down.”