RIYADH: Amid widespread efforts by the Organization of the Petroleum Exporting Countries to stabilize the oil market, the King Abdullah Petroleum Studies and Research Center disclosed that lifting sanctions on Venezuelan and Iranian oil will not have any short-term impact on the sector.
In its recently released report, KAPSARC stated that Iran’s oil production will likely grow to 5 million barrels per day with or without sanctions. In contrast, Venezuelan oil production is unlikely to reach 1 million bpd under sanctions.
Venezuelan oil production in 2022 was 723,000 bpd, significantly below the record it reached in 1997 of 3.52 million bpd.
Iran has a slight upper hand compared to Venezuela, as the Middle Eastern nation’s oil production stood at 3.82 million bpd in 2022, compared to 4.85 million bpd in 2017.
KAPSARC, however, added that Venezuelan oil production could hit 1.5 million bpd if the US, EU and its allies lift the sanctions.
“Iran is already expanding its production and exports under sanctions and lifting them would accelerate this process. However, lifting sanctions on Iran may be slowed by production limitations under the OPEC+ Declaration of Cooperation,” said KAPSARC in the report.
The report added: “Venezuela, with or without sanctions, has a limited upside. Lifting sanctions would help the country stabilize its market with a slow reverse in its production trend. It is estimated that the country could see a total increase of up to 500,000 bpd over the next seven years.”
In May, OPEC Secretary-General Haitham Al-Ghais said the organization would welcome Iran’s full return to the oil market when sanctions are lifted.
Venezuela has the largest proven oil reserves worldwide, with 303.2 billion barrels as of 2022, while Iran holds the fourth position with 208.6 billion barrels.
In Venezuela, sanctions have been linked to anti-democratic actions and human rights violations. In contrast, sanctions against Iran are based on the Joint Comprehensive Plan of Action on nuclear weapon development.