In my post : Oil to $20 by 2016 looks to be supported, perhaps underestimated by the upcoming decision on Iran’s nuclear deal & also talks of removing Economic Sanctions for Iranian Crude Exports.
Potentially one of the Middle-East’s biggest economies, Iran has been barred out by the West in refusing to give up it’s Nuclear regimes.
However, new developments have come from talks between Iranian negotiators & world leaders continued in Lausanne this weekend.
Tehran – A sleeping Oil Giant
Since Economic sanctions had been placed on Iran, Tehran has been frozen out from the International Oil markets & denied access to Investment leading to key developments in the Oil/Gas industries.
With Oil prices pressured by the over-supply – any increase in Iranian output could easily speed up this decline down towards $20 per barrel.
The Iranian Oil minster mentioned that they could easily increase production by 1 million barrels per day, almost immediately after sanctions are lifted.
Trouble with OPEC & Saudi Arabia
A potential limitation to this “flooding” impact comes from OPEC – the 12 member cartel controlling a 3rd of the World’s oil supply. It currently maintains a quota system that Iran would have to negotiate.
It is unlikely that Saudi Arabia will be in favor of any increase to Iranian exports & their ongoing meetings up until June will tell of these tales…. However, oil may reach $20 by then already!
