The baseline is for prices to return to about $70 for a barrel of Brent Crude in 2016. Additional supply from Iran would knock roughly $5/barrel off expectations – or less than one quarter of a standard deviation. Said another way, additional Iranian output could move prices lower, but many other factors, such as changes in global GDP or the return of Libyan oil, could prove more meaningful over the next year. What’s more, recent trading suggests the market has already priced in much of this risk.
Over the longer term, I believe an increase in Iranian output could be for sure significant. With investment and time, Iran could meet a greater share of global demand for oil and liquefied natural gas (LNG). It also could ship natural gas to Europe via pipeline, challenging Russia’s dominance.