Iran oil supply concerns are 'unduly bearish': Analyst

Storage worries plague oil sector
Storage worries plague oil sector   

Concerns that a nuclear deal with Iran could end sanctions on that country and flood an oversupplied market with oil are "unduly bearish," the managing director at Clearview Energy Partners said Tuesday.

"The deal they have probably won't bring back crude exports to their full level right away," Kevin Book said in an interview on CNBC's "Squawk Box." "It's probably going to be a series of gates and steps, a process where Iran has to do some things, the West will give some sanctions relief."

Oil prices began another leg downward last week as participants in negotiations over Iran's nuclear program suggested they are making progress toward a deal. The April contract for U.S. crude touched a six-year low below $43 on Monday after prices rebounded slightly in January and February.

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The first steps will unlikely roll back sanctions enforced in 2012, he said. Those include a European Union import ban on Iran's petroleum exports, as well as measures that target insurance and transportation companies connected to its oil sector.

"That's one of the hardest things to restore if they do, so it might be six or 12 months out before you get that 300,000 to 500,000 barrels per day," Book said.

Some energy experts believe Iran could ramp up exports to 500,000 to 800,000 within half a year, Reuters reported Tuesday.

The U.S. Energy Information Administration estimates that net exports of Iranian oil have fallen from about 2.4 million barrels per day in 2011 to about 1 million.

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If the United States and United Nations allows more foreign investment to flow into the country while export sanctions are being removed, Tehran will have more potential, Book said.

Congress is currently considering two pieces of legislation that could derail an agreement, one that would impose further sanctions on Iran and one that would subject any deal to end sanctions to congressional review.

Book said either bill would need a veto-proof majority in Congress, and that does not look likely.

"You might be able to pass a bill, but when the president vetoes it, the question will be where do Democrats stand? They're probably not all going to stand with the Republicans," Book said.