The nuclear deal with Iran could lead the country to export an additional 600,000 barrels of oil per day by the end of next year, federal energy analysts predict.
The estimate, published Thursday by the Energy Information Administration (EIA), assumes that the deal — between Iran, the United States and five other western nations — is executed successfully and sanctions on Iran are lifted on schedule.
“These additional Iranian supplies, along with relatively higher global oil production and comparatively slower global oil consumption growth, will contribute to large inventory builds next year, resulting in lower oil prices than previously expected,” the EIA said Thursday.
It estimated that North Sea Crude Oil Brent, an international price benchmark, would average $59 per barrel in 2016.
Before the Iran deal was announced, the EIA had predicted 2016 prices of $67 per barrel for Brent, the agency said.
The particular magnitude and other details of price changes depend on when sanctions are lifted, which depends on how quickly Iran meets the goals outlined.
“EIA expects most of this increase would occur in the second half of 2016,” it said.
“These additional Iranian volumes are expected to put downward pressure on global oil prices in 2016, as Saudi Arabia and the rest of producers in the Organization of the Petroleum Exporting Countries are not expected to make production cuts to accommodate additional Iranian volumes in a well-supplied global oil market.”
Iran exported about 1.4 million barrels a day in 2014; about half the amount it was shipping before western sanctions took effect in 2011.