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Oil price can plunge from the current $64 to about $25 per barrel after lifting sanctions on Iranian oil purchase, an oil market analyst told Trend.

Sam Barden, the director of Wimpole International, an energy market development company believes that the decision to raise Iranian oil export by 0.5 million barrels per day (mb/d) will certainly push prices down, because traders (financial through Brent complex) perception will go from having long positions in oil to short positions and that will mean price capitulation.

"Buyers become sellers and the price will overshoot to the downside. I think we will definitely see oil prices as low as USD $25 and I seethes as happening quickly".

Reuters published a report on June 15, quoting several sources as saying that Iran has stored 38 million to 45 million barrels of oil at sea to be exported as soon as the sanctions on Iran are eliminated.

Iran's Oil Minister Bijan Namdar Zanganeh has already said that the country can pump more, 0.5 mb/d of oil to markets a month after lifting the sanctions and this volume can reach 1 mb/d in six months.

Before the western sanctions on Iran, the country was exporting 2.5 mb/d of oil, but the figure has fallen to 1.2 mb/d in 2014 and 1.4 mb/d in recent months.

Barden said, "Iran cannot just stop production. As you know we cannot just turn oil wells on and off."

He said, "If sanctions lift, Iran will certainly look to regain market share and to sell their oil in storage into the market.”

The European Union had shared 18 percent of Iran's oil export, but suspended any oil intake from Iran in mid-2012.

Referring to restoration of Iran's European markets, Barden believes that if Greece exits the Euro, and reverts back to local currency like the Drachma, Iran and Greece could enter into product swaps, whereby Iran supplies oil to Greek refineries, they then on sell the refined products into Europe and share the proceeds with Iran.

"In this case, it will not mean Iran is selling oil at the lowest possible price but providing oil to a cash strapped Greece to refine and sell to Europe and share in the profits of the refined products," he said.

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