All eyes on Iranian oil production at next OPEC meeting, says KPMG

All eyes on Iranian oil production at next OPEC meeting

Many will be eager to learn how the potential increase in Iranian production will feature in OPEC’s production decision.

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Although some have written off this week’s OPEC meeting as a non-event, many will be eager to learn how the potential increase in Iranian production will feature in OPEC’s production decision.

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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This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.

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