Oil prices to fall unless EU Iran sanctions come into effect

Azerbaijan, Baku, May 30 / Trend A.Badalova / World oil prices will fall further, unless there is a very significant disruption to Iran's crude oil exports once the EU's sanctions come into full effect in July, Global Energy Studies Centre (CGES) believes. CGES stressed in its monthly oil report, that price for Brent has already fallen by $20 per barrel (17 percent) from their recent peak. Following the auction on May 29, the price on Brent futures for July decreased by $0.43 a barrel up to $106.98 per barrel. The cost of WTI futures for July on the New York Mercantile Exchange decreased by $0.1 percent to $90.76 per barrel. The EU members imposed sanctions on Iranian Central Bank, this country's oil purchases and rendering insurance service to the ships carrying Iranian oil on Jan.23 which will take force on July 1. The EU imported about 450, 000 barrels of crude oil from Iran (18 percent of Iran's total oil export) in 2011. "The EU's embargo on oil imports from Iran, announced six months in advance of its implementation, has already had an impact on the country's oil exports and US sanctions on the Iranian banking sector have extended the impact to its Asian customers," CGES said. According to CGES estimates, Iran's oil production has already fallen by around 10 percent since late 2011, and exports are expected to have fallen even further. Do you have any feedback? Contact our journalist at agency@trend.az