Iran should boost trade with its Gulf Arab neighbours if a deal on its nuclear programme sees sanctions and an oil embargo lifted, but higher Iranian crude production could worsen tensions within OPEC, analysts say. As of Saturday, the prospects of such a deal were still very much in question, with no sign of an end to a nail-biting deadlock after 15 straight days of negotiations in Vienna between Iran and major world powers.
Iran''s oil exports plummeted as a result of the embargo imposed by the United States and European Union, dropping from about 2.2 million barrels per day (bpd) in mid-2012 to about 1.2 million bpd now.
Fellow OPEC members Saudi Arabia, Kuwait and the United Arab Emirates boosted production to make up for that, keeping supply levels stable.
Iranian officials have said Tehran is looking to return to pre-embargo levels, though experts say production increases will take time. "All additional Iranian production will go to export but this will not aggravate the surplus on the market because the increase will be gradual," said Jassem al-Saadun, head of Kuwait''s Al-Shall Economic Consultants. "I think it may take Iran a few years before reaching the target of an additional one million barrels."
Saudi Jadwa Investments said in a recent report that Iran would add just 150,000 bpd by the fourth quarter of this year.