An Iranian official has warned the price of oil could slump to $25 per barrel by March, once international sanctions over its alleged nuclear programme have been removed.
Fereidun Fesharaki, a former oil adviser to the Iranian prime minister, told The Times that Brent crude, the international benchmark, could drop to between $25 to $30 per barrel if Iran adds to the supply glut which is currently weighing on prices.
Oil prices lurched to a 12-year low yesterday, amid financial market turmoil in China. They have since recovered slightly, with Brent up 1.72 per cent at $34.33 per barrel.
The black stuff has shed around 70 per cent since June 2014, as an abundance of it has been compounded by waning demand from slowing emerging market economies led by China.
They've also been hurt by Opec countries' refusal to cut production in a bid to defend their market share from the US shale gas industry. It's feared Iran will add to the persistent glut when it returns to the market.
Fesharaki, the Iranian chairman of energy consultancy FGE, said it would be easy for Iran to boost output by half a million barrels per day within just one week of sanctions being lifted.
"The Iranians are ready to bring 500,000 barrels per day and they already have customers lined up," he said.