EU ban on Iran oil may be bonus to Tehran's fields

February 24, 2012 13:54

LONDON - Europe's ban on Iranian oil, aimed at piling pressure on Tehran over its nuclear program, may end up breathing new life into the country's aging oilfields, Western and Iranian oil experts said on Friday.

If Iran were forced to shut in any - or all - of some 500,000 barrels per day (bpd) of supply that would have gone to customers in the European Union, such a move would help rejuvenate, not harm, the Islamic Republic's oil reservoirs.

There is a widespread expectation among oil traders and shipping brokers that Tehran will float much of the displaced European oil on tankers, because it does not want to shut in output and wreck the reservoirs.

But in actual fact, slowing Iran's current production of 3.5 million bpd would be the best thing for its overworked reserves, say veteran geologists. And in the short term, the National Iranian Oil Co (NIOC) may end up doing just that while it works to re-route the oil.

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