61
million barrels per day; at present, its production is 6 million. In addition, Iraq is
planning to increase its oil production to 12 million bpd. Such a situation will no
doubt decrease Iran’s share in the world market (Maleki 2011:61–66).
Iran Energy Profile
As stated, Iran holds the world’s fourth-largest proven oil reserves and the world’s
second-largest natural gas reserves (www.eia.gov 2017a, b, c, d). In addition, the
latest Statistical Review of World Energy published by BP has revealed that Iran has
the world’s largest gas reserves, with 33.6 trillion cm
3
, but the gas sector is developing and currently only covers domestic demand (www.presstv.ir 2017). According
to 2010 figures, gas accounts for about 59% of Iran’s total domestic energy use,
while oil consumption accounts for 39% (www.presstv.ir 2017).
On May 10, 2012, the Mehr News Agency announced that Iran had discovered a
new oil reserve in the Caspian Basin with a capacity of 8–10 bb. It was reported that
the Ministry of Petroleum would officially announce the opening of the field in the
coming months. Mehr News also announced that in the meantime, Iran had discovered new natural gas reserves in the Caspian Sea with a capacity of 50 trillion cm
3
(www.mehrnews.com 2017).
Oil Swaps
Iran is preparing for a different role, both as a user of Caspian and Russian oil and
as transit country offering a far cheaper alternative to oil transport and the BTC
pipeline. Iran holds the potential to receive oil at its northern ports in Neka,
Mazandaran Province, and transfer these to its ports in the south to be delivered to
the growing Asian markets. This will soon be facilitated via a railway line linking
both its coastal frontiers (S. Crandall 2006:113).
The cost of transit for such exchange would total the equivalent of $1.50–2 per
barrel, thereby reducing Tehran’s transport costs to feed the northern refiners at
Tabriz and Tehran. Such a strategy would be attractive to Caspian Sea states and
Russian producers since such swaps would prove more cost-effective than a series
of pipelines to the Black Sea. Swaps have begun from 110,000 to 150,000 bpd, but
capacity could rise 700,000 to 1mmb/day, especially if the Russians agree to swap
up to 300,000 bpd (S. Crandall 2006:113).
By mid-2005, Turkmenistan and Kazakhstan together swapped around 60,000
bpd with Iran. In early 2006, the swap capacity was raised to 80,000 bpd and reached
100,000 bpd by the end of 2007. In 2003, Russian Luk Oil signed an agreement with
Iran for a similar oil swap. Initial capacity was 25,000 bpd, but this had risen to
40,000–50,000 bpd by the end of 2004, with capacity rising to 120,000 within a
number of years (S. Crandall 2006:114).
Iran
million barrels per day; at present, its production is 6 million. In addition, Iraq is
planning to increase its oil production to 12 million bpd. Such a situation will no
doubt decrease Iran’s share in the world market (Maleki 2011:61–66).
Iran Energy Profile
As stated, Iran holds the world’s fourth-largest proven oil reserves and the world’s
second-largest natural gas reserves (www.eia.gov 2017a, b, c, d). In addition, the
latest Statistical Review of World Energy published by BP has revealed that Iran has
the world’s largest gas reserves, with 33.6 trillion cm
3
, but the gas sector is developing and currently only covers domestic demand (www.presstv.ir 2017). According
to 2010 figures, gas accounts for about 59% of Iran’s total domestic energy use,
while oil consumption accounts for 39% (www.presstv.ir 2017).
On May 10, 2012, the Mehr News Agency announced that Iran had discovered a
new oil reserve in the Caspian Basin with a capacity of 8–10 bb. It was reported that
the Ministry of Petroleum would officially announce the opening of the field in the
coming months. Mehr News also announced that in the meantime, Iran had discovered new natural gas reserves in the Caspian Sea with a capacity of 50 trillion cm
3
(www.mehrnews.com 2017).
Oil Swaps
Iran is preparing for a different role, both as a user of Caspian and Russian oil and
as transit country offering a far cheaper alternative to oil transport and the BTC
pipeline. Iran holds the potential to receive oil at its northern ports in Neka,
Mazandaran Province, and transfer these to its ports in the south to be delivered to
the growing Asian markets. This will soon be facilitated via a railway line linking
both its coastal frontiers (S. Crandall 2006:113).
The cost of transit for such exchange would total the equivalent of $1.50–2 per
barrel, thereby reducing Tehran’s transport costs to feed the northern refiners at
Tabriz and Tehran. Such a strategy would be attractive to Caspian Sea states and
Russian producers since such swaps would prove more cost-effective than a series
of pipelines to the Black Sea. Swaps have begun from 110,000 to 150,000 bpd, but
capacity could rise 700,000 to 1mmb/day, especially if the Russians agree to swap
up to 300,000 bpd (S. Crandall 2006:113).
By mid-2005, Turkmenistan and Kazakhstan together swapped around 60,000
bpd with Iran. In early 2006, the swap capacity was raised to 80,000 bpd and reached
100,000 bpd by the end of 2007. In 2003, Russian Luk Oil signed an agreement with
Iran for a similar oil swap. Initial capacity was 25,000 bpd, but this had risen to
40,000–50,000 bpd by the end of 2004, with capacity rising to 120,000 within a
number of years (S. Crandall 2006:114).
Iran