George Johnson, executive advisor, oil & gas at KPMG, said: “With Iranian production expected to ramp up within a matter of months (subject to the lifting of sanctions) – OPEC faces an interesting dilemma: maintain the existing quota by absorbing additional barrels through a collective adjustment, or, increase the overall production quota to accommodate Iranian volumes.
“Many expect production to be maintained at the current levels. However, OPEC’s track-record of maintaining the 30/mbpd quota has been somewhat disappointing – having consistently exceeded the cap over the last 12 months.
“Increasing the production quota, however, could trigger selling pressures in the futures market potentially heralding the return of a bear market – much to the frustration of upstream players.”
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Simon Chan, PR Assistant Manager, KPMG
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KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff. The UK firm recorded a turnover of £1.9 billion in the year ended September 2014. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 162,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.