Sputnik: How justified are concerns of the shortfall in global energy supply amid anti-Iranian sanctions?
Dr. Hafez Abdo: The world has every reason to be concerned about the future shortages of supply of oil and gas because of what's going on between the United States and Iran. This is not new, because the sanctions were lifted from Iran a few years ago, then they added more oil and gas into the market, oil prices came down, now we are facing the same situation.
There is a concern that oil prices are going to increase. Analysts predicted early in July that oil prices will probably increase by $4 to $5; however, they increased by much more. They were about $61 in July, now they are about $80+, so we expect oil prices to increase to above $100 in a few months — actually, in a few weeks.
READ MORE: New US Sanctions on Iran to Seriously Affect Oil Prices — Iranian Minister
Sputnik: So you think we're going to see $100, three-digit oil prices, within weeks?
Dr. Hafez Abdo: Yes, when America will apply more sanctions on Iran, Iranian oil supply will be cut and there will be pressure on OPEC and non-OPEC suppliers to enhance supply. However, there is a limit to how much they can add to the market, especially for Saudi Arabia, the maximum they can add is one million barrels a day, while the cut in Iranian oil supply is expected to be 2.5 million barrels a day.
Sputnik: Trump has asked OPEC to boost production. What is the extent that we can realistically expect to see an increase in production by OPEC?
Dr. Hafez Abdo: Trump can dream as he'd like, he's a businessman and he has political power now. He's dreaming a lot; he wants OPEC to increase production. But the OPEC members had a meeting some time ago and they agreed not to increase production, because when they increase production oil prices will decrease and that's not to their advantage.
If they sell oil at a higher price, they'll make more profit. I'm not sure why OPEC members would listen to Mr. Trump, I'm not seeing much supply in the market based on Trump's instructions and orders. As I said, he's just dreaming now and I'm not sure how realistic are his dreams in terms of increasing, enhancing oil supply. I'm not very optimistic about Mr. Trump‘s wishes.
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Sputnik: Yet we have the signatories of the JCPOA; we have Turkey, we have other countries that have said that they will continue to purchase Iranian oil and gas and a lot of European countries have said that would create a system in order to bypass US sanctions. Is there any way that all of these measures could actually decrease the impact of the additional sanctions on Iranian crude exports?
Dr. Hafez Abdo: If it happens, it will. The international oil supply will not be cut severely if we talk about Turkey, for example, if they're going to satisfy part of their oil and gas demand from Iran, that is going to put less pressure on the international oil and gas market. But to what extent can a country like Turkey just disobey American sanctions and try to face them, because we've seen how much Turkey suffered recently from some financial instability and the Turkish know that if they object Trump, they may have some sanctions on them.
The views and opinions expressed in the article are those of Dr. Hafez Abdo and do not necessarily reflect those of Sputnik.
