The significance of the issue will cause the Islamic Republic to loose its weight as an oil exporter if incorrect decisions are to be made.
A number of the world's energy agencies refer to Iran's influential contribution to the international oil market. Some others underline that the country would be eliminated from the list of oil exporters in future due to the present condition of making investments on Iranian oil industry and executive plans underway to keep it going.
However, the general point made in such forecasts is that the executive policies to be followed by the Islamic Republic's oil officials within the next five years will delineate its fate in the international market. If the officials do not make accurate decisions on the process of investments or injecting gas to the oil fields, developing the fields and so on, Iran's plans as an oil exporter will turn to an unattainable dream.
Obviously the situation of supply and demand in the forthcoming years will also make an impact on Iranian oil policies. The consideration of oil trade in near future may help the country to achieve a leading role on the scene of international oil market.
For the meantime, reliable international research institutes give their own prediction on the future of the oil market which can be categorized in two optimistic and pessimistic estimations. The optimistic prediction is based on the growth of global economy and leaving behind the world's financial crisis. On the other hand, the pessimistic prediction emphasizes that the current setback will be continued and the financial crisis might get from bad to worst.
But despite the differences between the proposed figures on the future of future of oil trade, all theories implicate that it demand for oil would be reduced.
The most coherent and reliable figures have been provided by the Paris-based International Energy Agency (IEA) which is an energy adviser to the United States and other industrialized nations. IEA maintains that within the next years the world's demand for oil will be dropped by 4.700.000 barrels per day as the total demand will fall from the current 86.300.000 barrels a day to 81.600.000.
The oil demand would be concentrated on China and the countries of the Middle East, so the influence of these countries on the future of oil business will be undeniable.
But here the issue at stake is who will lead the oil market future, an issue which is the source of difference among the international research institutes, since based on their analyses and ideas, each of them point to a particular country or organization as the future key player on the scene of the international oil trade.
Some regard the United States as the leading player of the scene and some others argue that Russia would be the most influential country in the oil market. A number of experts believe that the ground is provided for Iraq to raise its stakes in the oil market and it's possible that Iraq replaces Iran as the Middle East's second biggest oil producer.
Iranian oil officials propose their own analysis as well, as Mohammad Reza Moqaddam. Iran's deputy Oil Minister in the research and technology affairs believes Iran and Iraq will play the key roles in the international oil trade within the next 25 years.
Moqaddam has based his optimistic analysis on a theory introduced by the Institute of Energy Economics in Japan saying that this entity is currently the most reliable Institute whose forecasts are more close to reality.
However, the oil experts suggest other theories on the future of Iranian oil industry maintaining that if the current trend is to be followed, in the most optimistic situation Iran would turn to an oil importer by 15 years and in the most pessimistic scenario won't be able to produce oil by 8 years.
According to the Wall Street Journal, IEA has forecasted Iran's oil pumping capacity to drop about 18%, or roughly 700,000 barrels a day from current levels, to 3.30 million barrels a day by 2015. If the forecast pans out, and if projections for Iraqi production increases prove accurate, the Islamic state's output in five years will trail Iraq for the first time in three decades.
Iraq has become the most important investment spot for major oil companies because of its huge, undeveloped reserves, the fourth biggest after Saudi Arabia [the Middle East's top oil producer] Canada and Iran.
That would ultimately lead to Iran getting a smaller production quota in the Organization of Petroleum Exporting Countries (OPEC), meaning less revenue for the oil-dependent government in Tehran. That prospect also implies Iran having less weight within OPEC, where influence is tied to output capacity.
During the eight years war imposed on Iran by Iraq, the former countrry's oil infrastructure was damaged and many oil experts left the country. Many of Iran's oil fields are older than those of their Middle East neighbors, and so are declining much faster. Iran has to replace roughly 300,000 barrels a day of production each year from old fields just to keep its total output from falling.
More recently, many foreign oil companies sought out by Tehran for their expertise and capital have been deterred by the increased politicization of Iran's energy sector. The US pressure in recent years on foreign companies that have long done business in Iran has succeeded in sidelining several big investors.
Iran's situation is in stark contrast to Iraq. International oil companies have snapped up development blocks and rushed into big investment commitments since Baghdad opened its oil fields to competitive bidding last year. Many analysts conservatively estimate Iraq could boost its oil production capacity by at least a million barrels a day to a total of 3.5 million barrels a day by 2015.
Although experts say the lack of investment needed for developing Iranian oil fields and injecting gas to the reservoirs in the recent years has resulted to a huge loss for the country, the officials of the oil ministry stress on the investments to be made this year on the fields hoping to increase the Iranian oil output by 5 million barrels a day within 5 years.
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