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Iranian Oil Exports To Double Following Nuclear Deal
Submitted by Andy Tully via Oilprice.com,
While not predicting that Tehran and six world powers will strike a deal by the new July 10 deadline, a senior Iranian oil official says his country hopes to nearly double its crude exports immediately if and when sanctions are lifted and hopes that OPEC will accommodate this growth by capping production by the cartel’s other members.
“We are like a pilot on the runway ready to take off,” Mansour Moazami, Iran’s deputy oil minister for planning and supervision, told The Wall Street Journal inTehran on July 5. “This is how the whole country is right now.”
Today Iran is exporting about 1.2 million barrels of oil per day, but that figure would reach 2.3 million barrels after sanctions are lifted, Moazami said. That would pose problems for OPEC, which is exceeding its formal ceiling of 30 million barrels per day, a high level of output intended to hold onto market share and force higher cost producers from around the world to cut back.
Moazami is urging OPEC to return to setting production limits on individual members. “Their mechanism right now is not proper. It has to return to its past ability and capacity,” he said. OPEC ended that practice in 2011 because it generated bad feelings among the members, who flouted them anyway for their own profit. But individual quotas can’t be reintroduced except by unanimous vote.
Instead OPEC moved to a cartel-wide ceiling of 30 million barrels per day, a level that remained static even in the face of the oil glut that began in June 2014. And even as the oversupply persists today, OPEC members are collectively exceeding that limit by 1 million barrels per day.
Even if Iran is able to double its oil output, the notion that OPEC might change its output quota is unlikely given Saudi Arabia’s already strained relations with Tehran. Not only have the two countries long been at odds over Islam – Iran is Shi’a and Saudi Arabia is Sunni – Iran, through Houthi rebels, is today fighting what many call a “proxy war” with Saudi Arabia in Yemen.
Further, Saudi Arabia, whose Oil Minister Ali al-Naimi is the architect of OPEC’s price war against American shale producers, has been producing oil at near-record highs over the past several months and probably would be reluctant to cut back to make room for increased Iranian production.
But Moazami said a rise in Iranian output wasn’t likely to cause oil prices to fall further because the extra crude on the market would be quickly snapped up as the world’s economy improves, stimulating greater demand for oil. He said he expects the average global price of crude will reach $70 per barrel by year’s end.
There’s been some talk of progress during Iran’s talks in Vienna with Britain, China, France, Russia and the United States – the five permanent members of the U.N. Security Council – along with Germany. On July 5 U.S. Secretary of State John Kerry cited “genuine progress” in unspecified areas, but added that “this negotiation could go either way.”
There was one piece of specific news on the status of the talks. Yukiya Amano, the director-general of the International Atomic Energy Agency (IAEA), said July 4 in Vienna that his group could have enough data by the end of the year to issue a report on its probe of previous Iranian nuclear research suspected of being associated with the development of nuclear weapons.
Gathering details on such work has been a snag in the negotiations. Iran has denied it ever conducted weapons research, and so far it’s refused to answer the IAEA’s questions on the matter. But access to such information and using the data for future monitoring is a condition for lessening some of the sanctions on Iran.
Amano didn’t say whether this development signaled concrete progress, but in Tehran, Deputy Prime Minister Abbas Araqchi, said Amano’s meeting Thursday with President Hassan Rouhani was “positive and successful” and that the Iranian government is “ready to settle” the issue.
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Is this good for shale? hahahaha
Now the shale hedges are unwinding, how long will it be before the debt market blows up?
Don't count shale out yet. Israel and their loathsome neocon fellow-travelers are still trying to sabotage the Iran deal.
Is this good for shale? hahahaha
no but it is great for 'Petodollar'. As long as there is Petodollar shale debt can be managed. Just like: Housing, autos, credit cards, etc... the money to pay for shale will keep flowing as long as their is a FED balance sheet. With petordollar there will be an economy and a safety net to trade past years bad debts into new 'capital' from the FED. And they say capitalism is dead? nope, just transormed.
Just one more reason Israel 'won't allow nuke deal.
I have said this from day one, America is still a hungry beast and needs Iran's oil. If America can sink a straw in that desert, Iran will get a "deal".
the banks/petrodollar needs Iran's oil........not america....
Same difference, it's the Fed, period. Average people, regardless of origin, are always cannon fodder at the end of the day.
This should help stablize prices. \s
Fucking YIDS will go ballastic if this deal gets done, as will the Saudi vermin.
The Yids and the House of Saud already know a deal is getting done. Doesn't matter if it's good or bad, it's getting done. No mention of Russia, though?
We get a new "ally" in Iran, the Russians get Saudi Arabia from us. Seems like a fair swap.
That's another 20% of the oil price, and, perhaps more significantly, a serious headache for the Saudis.
More Russian pipe dreams praying that the shitty sulphur laden oil from Persia will make its way to Russian refineries that the Brits had to build for them for lack of tech.
Not lookin good for Canada. Oil patch slowing causing construction to crater. Construction has been on a tare the last few years overshadowing a slowing economy. C$ down 25% ain't helping at all. Debt has been hyperinflating at every level of g't and in the private sector. The only hope Canada has is rates to go negative and the dollar down to 50 cents or less. Talk about can't pay their debts should be centered on Canada and its "safe" bank cartel. Bailin legislation, hidden in last years budget on page 154, about to be inflicted on savers.
Forget Greece, Canada and the US are the basket cases.
This development should give new meaning to "pump n dump."
1 guy in my office has a lunch bet with another guy that oil will have a 40-handle before it has a 70-handle.
thats good for me because i have a bet with him that we see QE4 before our first rate hike.
i told him he basically just hedged his lunch bet with the other guy against me cuz if oil gets rolling downhill in the 40's, the other guy he bet with may as well just buy my lunch & that squares us all-out.
The Iraqi government is in deep shit already. The IMF and World Bank loans are drops in the bucket.
Once Iranian oil comes online....Iraq is going to be up the shit Euphrates with an AK-47 for a paddle.
How's gold doing?
Remember that Iran is a country of Ayatollahs, i.e., illiterate religious fanatics and thieves. They are not any different from leaders of ISIS.
Consequently, their international negotiation skills and geopolitical vision are even much worse than of the former Saddam Hussein.
seriously? is this 'SARC' or WTF... or are you incredibly stupid!
pope's rabbibs
"Empire of Chaos -- Iran Nuke Deal: What's behind the new Vienna Deadline" by Pepe Escobar @ http://atimes.com/2015/07/iran-nuke-deal-whats-behind-the-new-vienna-dea...
http://atimes.com/category/empire-of-chaos/
I wonder what US shale industry thinks about the Iran deal...
I don't see how there is going to be ANY deal anytime soon. You heard it here first.
Iran should start selling only in BRICS currencies and show a middle finger to west.