Iran expected to ramp up oil exports if Biden defeats Trump in presidential election

Iran expected to ramp up oil exports if Biden defeats Trump in presidential election
Joe Biden's win at next month's presidential election could have a major effect on the world oil market.
2 min read
08 October, 2020
The oil industry suffered steep falls in benchmark crudes due to the coronavirus pandemic [AFP/Getty]

Iran's oil output could increase dramatically if Democratic contender Joe Biden wins the US presidential election, the head of the International Energy Forum told Bloomberg.

Joe McMonigle, who was previously an official at the US Department of Energy, said the Islamic Republic could restore almost 2 million barrels of oil exports should Biden beat President Donald Trump next month.

Tensions have soared between the US and Iran under President Donald Trump, who pulled out of a nuclear accord negotiated by his predecessor Barack Obama - as well as other nations - and placed sweeping sanctions on Tehran.

Biden has said that he "will offer Tehran a credible path back to diplomacy", paving the way for the US to the UN nuclear agreement on Iran - a deal struck while Biden was Obama's vice-president.

After Trump's withdrawal from the deal in mid-2018, Iran's crude production dropped by almost half.

McMonigle told Bloomberg that should Biden revive the nuclear pact, this will likely lead to an increased output from Iran.

"An immediate impact of a change in administration in the US would be the situation with Iran," McMonigle said in an interview with Bloomberg Television on Thursday.

"I don't expect all 2 million barrels - or 1.8 million to be exact - to come back immediately. But you'd probably see half a million barrels. The US would probably have to do something like that to restart negotiations with Iran. For the oil market, it's really, really big." 

McMonigle, who works for the Saudi-based International Energy Forum, said the possibility of a higher oil output from Iran, as well as Libya, will be closely watched by OPEC+.

The group of oil producing countries, which includes Russia, is set to meet again in early December.

OPEC+ has been seeking to cut the production of oil to keep prices up.

McMonigle said OPEC+ is likely to stick to a plan which will see production increased by 2 million barrels daily in January, although this is by no means guaranteed.

"The introduction of Iranian and Libyan production may require some adjustments," he said.

Demand for oil was hit hard by the world-wide shutdowns to counter the pandemic, sliding at one stage by over 20 million bpd.

Tehran and Washington, long-time enemies, have not maintained diplomatic relations for decades.

Agencies contributed to this report

Follow us on FacebookTwitter and Instagram to stay connected