April 6 (UPI) — The price for oil is well above the point where Iran can break even and production could flirt with 5 million barrels per day in three years, data show.
GlobalData, a data and analytics company, estimated Iran will spend more than $20 billion over the next three years to make sure production could approach 4.9 million barrels per day. The company forecast at least 38 conventional and nine heavy oil fields producing for Iran by 2021.
“The average development break-even price for oil projects in Iran is about $27.60 per barrel,” GlobalData estimated in its emailed report.
The price for Brent crude oil, the global benchmark for the price of oil, was closer to $68 per barrel early Friday.
Iran is facing an uncertain future given U.S. President Donald Trump’s frustration with a multilateral nuclear agreement that gives the country sanctions relief. Former U.N. Ambassador John Bolton is now serving as Trump’s national security advisor. In January, Bolton said the U.N.-backed agreement is based on “fundamentally flawed premises.”
Swiss multinational investment bank UBS said in a research note emailed to UPI that geopolitical risk associated with Iran was putting strength behind the price of oil. The 12-month average for Brent could be around $62 per barrel, up from the bank’s previous estimate of $57 per barrel.
Ali Akbar Salehi, the head of Iran’s atomic energy agency, said those seeking to undermine the nuclear agreement will be given “an unforgettable lesson.” There’s no doubt, he said through the official Islamic Republic News Agency, that Iran will act differently if it’s no longer held to the agreement.
A member of the Organization of Petroleum Exporting Countries, secondary sources reported that Iran produced around 3.8 million barrels per day in February, the last full month for which data are available.