The issue is how quickly Iran would be able to ramp up production back to pre-sanction levels as the nation s oil infrastructure has suffered as a result of the embargo. OPEC will obviously have a prominent role to play in what happens to global oil production and trade, but which OPEC producers will give up their market share to accommodate the return of almost 1 million b/d of Iranian crude sales?" Gibson stated that "since sanctions were implemented, Iranian production has fallen by 0.8 million b/d. However, according to some sources, the US needs to see the oil price stay above the $90 barrel level to make exploitation of shale oil a viable proposition.
China and India would particularly welcome cheaper oil. Cheaper oil will benefit everyone with the exception of the producers, who will be fighting to maintain the value of their barrels, and of course market share. OPEC, in the past has stepped in to implement production control to achieve oil prices that are perceived too be fair to all. First of all, what will happen to the oil price? With Middle East tension lifted, the price could fall rapidly. According to the shipbroker, "we can all speculate on what will happen should Iran be welcomed back into the international family and at what speed events could unfold. Of course a peaceful setlement would be welcomed by all, following many years of threats and uncertainty which has impacted on every nation at some level", it said. While we are still a long way from any resolution on the whole nuclear issue, at least both sides in the dispute are now engaging in talks, albeit at a very preliminary level. Much to everyone s surprise Iran has offered an olive branch to the West following the election of Hassan Rouhani in June. According to the latest weekly report from London-based shipbroker Gibson, the consequences of such an event for the VLCC tanker market could be "catastrophic" : SEA BAY IMO, 2009/60193gt, out from Melbourne off Sorrento Photo : Andrew Mackinnon Gibson noted the "assumption that a change of President in Iran would bring little change in their stance on their nuclear programme and that normal hostile relations would continue, now appears to be unfounded. 3 VLCC tanker market to face"catastrophic" consequences in the event of a return of Iran's oil to the international market Things are moving again in the Iranian oil issue and this time, events are unfolding towards the opposite direction, that of the return of the country's resources to the international market.