Center for Strategic Assessment and forecasts

Autonomous non-profit organization

Home / Economy and Finance / Markets: estimates and projections / Articles
The World Bank predicted a fall in the price of oil at $ 10 because of Iran
Material posted: Publication date: 22-08-2015
The World Bank is waiting for the fall of oil prices to $ 10 from lifting the sanctions against Iran. According to experts, most from the resumption of trade with Iran would benefit the EU, the US, China, India and Turkey.

After removal from Iran imposed on it before sanctions oil inflow on the world market will be augmented approximately by 1 million barrels a day, follows from the forecast of the World bank (VB). By estimates of experts VB, returning to the market of the Iranian oil will lead to drop of the forecast mean price for 2016 of one barrel approximately on $10 (from $66 to $56) that will make essential negative impact on incomes of budgets of the largest countries-exporters of oil.

In particular, reduction of incomes of Saudi Arabia from export of oil experts VB value in $40 mlrd in year, and similar losses of Libya - in $5 billion Iran, according to VB, the incomes will augment, as from magnification of bulks of oil export will win more than will lose from drop of the oil prices.

Experts VB also expect that after removal of sanctions Iran can augment considerably inflow of forward foreign investments arriving in national economy. In 2016-2017 they can already compound $3-3,2 mlrd that approximately twice more than present level. Thus the Iranian authorities value requirements of oil and gas quadrant of the country for investments till 2020 in $130-145 billion

The oil countries-importers as it is marked in report VB, will win not only from drop of the world oil prices, but also from renewal of high-grade trade with Iran. Thus the greatest benefit from renewal of trade with Iran will receive the USA and EU (after the introducing of sanctions it was abbreviated at these countries hardly probable not to zero point), China, India, Turkey, and also Saudi Arabia. Among the countries which one can augment bulks of trade with Iran, experts VB call also Russia. In 2000 on a fraction of Russia it was necessary about 11 % of the goods imported by Iran (the third place among trading partners of Iran), in 2014 it was abbreviated to 2 %.

Earlier experts Morgan Stanley declared that in case of returning of Iran released from sanctions and situation stabilising in actually encompassed civil war of Libya inflow of new oil can degrade a situation and lead to the strongest for last 30 years to dip of the oil prices. In forecast Morgan Stanley it was noticed that in this case droop will be fastened down at least for three years - «much worse, than in 1986».

In 1986 oil overproduction became the reason of sharp dip of the world prices for it. If in the early eighties barrel cost reached $35 (about $100 in recalculation on modern money) in 1986 it was pulled down below $10 (hardly more than $20 at a present course) and did not rise above $20 throughout several years. The Countries-exporters of oil had severe financial losses, and for the USSR sharp reduction of inflow of petrodollars, by estimations of some experts, became one of the reasons of economical crash.

The day before experts of investment bank JP Morgan have sharply slashed the forecast at the prices for oil in 2015. According to the new version of the document, the mean price of barrel Brent in 2015 is slashed on $16 - to $54,5. In 2016 it, according to the experts, will be slashed to $52,5 that on $19 below the previous estimation. In JP Morgan consider that in dip of the world prices for oil will result magnification of bulks of oil extracting and the beginning of a season of preventive repair work at refineries.

Буфер обмена-1.jpg

During the auctions on Tuesday at stock exchange ICE cost of futures for oil of mark Brent with delivery in October, 2015 fluctuates around $51 for barrel, having risen on a maximum to $51,69 for barrel. ​

Evgenie Kaljukov

Source: <>

Tags: Iran , Exchange , oil

RELATED MATERIALS: Economy and Finance