Tehran (IP) - The director-general of OPEC Affairs and Relations with International Energy Assemblies of the Ministry of Petroleum, said that the average price of Brent crude oil in 2021 is expected to fluctuate between $48 and $50 per barrel.

Iran PressIran News:  According to Shana, addressing a specialized panel on the future of oil export markets at the 6th Iranian Petroleum and Energy Club Congress and Exhibition (IPEC 2021), Afshin Javan stated that the world economic growth in the new normal state is the same as 4.4 percent that was predicted by the Organization of the Petroleum Exporting Countries (OPEC), and in the state of recession will be 2.77 percent, adding: "According to a new report by the International Monetary Fund, India and China as the main players in oil demand will experience 11 and 8 percent economic growth in 2021, respectively."

Javan stated that the demand for oil in the new normal conditions was 5.9 million barrels per day. In the recession, the scenario will be 5.6 million barrels per day and reminded that in 2021 and 2022, OPEC is still at a crossroads of increasing or decreasing production and pricing strategy or market share.

"The world is experiencing a massive recession after COVID-19, and in the medium-term, the oil and gas industry is likely to accelerate its transition to cleaner energy sources away from traditional patterns, which is a significant issue," he said, adding: "The steady decline in global oil demand is encouraging major oil producers with strong political and financial incentives to supply well in the market to balance the market."

Hojjatullah Ghanimi-Fard, a former adviser to the Secretary-General of the Organization of the Petroleum Exporting Countries (OPEC), also addressed the panel remotely via video conference,

"The Saudi-Russian price war in early 2020 caused the price of crude oil to fall sharply and 55 US crude oil types, including WTI, fell to the negative region in April 2020. The lowest price was recorded for one of the types of US crude oil with a negative figure of $55 and 5 cents. This event may be repeated," he said.

"We should not rely on the current rise in crude oil prices, and relying on it may have the opposite effect," he said, referring to oil demand. "Oil demand has not risen in 2021, contrary to forecasts. With the start of the New Year and the new wave of the coronavirus pandemic, we see a decline in demand in January, demand for China also declined in January, and this trend is expected to continue in February,” he added.

The former adviser to the Secretary-General of the Organization of the Petroleum Exporting Countries (OPEC) said that if the third and fourth COVID-19 waves continue in different countries according to current forecasts, we should not rely on the forecasts of international organizations and institutions for increased oil demand in the second half of 2021.

Ghanimi-Fard raised the question of why oil prices are rising due to market trends and declining demand in the transportation sector, adding that the monetary and fiscal policies of the major oil-consuming countries in 2020 prevented further reductions in oil prices. Distributing cash to people, distributing money for travel, giving coupons to go to restaurants, etc. were among the measures taken to provide liquidity to those who lost their businesses, help the economy, and allow further reduction of demand for oil. There have also been great incentives in Europe and the United States. The new US President's decision to distribute $1.9 trillion in liquidity for the two years 2021 and 2022 is in line with this issue and causes the price of oil to remain high temporarily.

He said that if the economic problems in the world are not solved, there is a possibility of repeating the April 2020 event in the oil market, adding: "Events in Europe and countries such as France, Britain, the Netherlands, Italy, etc. show that oil demand this year cannot be as expected by everyone, so “we must prepare ourselves on the demand side."

The former adviser to the Secretary-General of the Organization of the Petroleum Exporting Countries (OPEC) referred to the supply of crude oil, and said: "The supply of crude oil to the market in recent years and before the arrival of Libya, whose last production figure is about 1.3 million barrels per day, had been reduced by 5 mbd in various ways, including creating unrest inside producing countries and banning oil exports from Iran and Venezuela."

Ghanimi-Fard continued: "If we assume that the sanctions on Iran are completely lifted by the United States (about which I am personally very optimistic) and Iran and Venezuela will supply 3.5 million barrels per day from the 5 million barrels that were removed from the market, the market will face a supply glut, in return for which the supply of OPEC countries and its allies cannot be expected to decline further."

He referred to the recent OPEC Plus meeting. He said that the decision taken at the meeting to reduce production for February and March would not affect the supply in the market and that on the one hand, there is no reliable demand for crude oil in the market and on the other hand the amount of supply is increasing.

He went on to underline the effects of the return of Iranian and Venezuelan oil to the market, saying: "Iran's return to the oil market has been experienced before, and when I was in OPEC, I heard high-ranking officials from one of the most prestigious international institutions in an official meeting say: "We did not believe that Iran's oil production and exports could increase in a short period of time, so a return to the Iranian oil market is possible."

"Everyone knows that the oil demand, which was supposed to exceed 100 million barrels per day in 2020 for the first time in the 170-year history of the oil industry in the world, has fallen," he said, adding: "It shows how fragile the oil demand can be. Some forecasts suggest that demand for 100 million barrels of oil is unrealistic by 2024. It is not to think that we can increase our oil exports and that other countries will reduce their oil production and that we will enter a period of prosperity to gain market share."

He cited Saudi Arabia, Russia, and the United States as countries that took Iran's share of the oil market, saying: "Iran (National Iranian Oil Company) and Saudi Arabia (Aramco) never went to a price war over each other: "Iran must take a friendly path."

207/206.

Read More:

Iranian oil company voices readiness for resuming pre-sanctions output