Iran Unleashes Oil Flood, Will Quintuple Crude Revenue In 2016
On Saturday, Iran marked what President Hassan Rouhani called a “golden page” in the country’s history when the IAEA ruled that Tehran had stuck to its commitments under last year’s nuclear accord.
Moments after the ruling was handed down, the US and the EU each lifted nuclear-related financial and economic sanctions on the “pariah state,” much to the chagrin of Israel and Tehran’s regional rivals who view the West’s rapprochement with the Iranians with deep suspicion.
"Everybody is happy except the Zionists, the warmongers who are fuelling sectarian war among the Islamic nation, and the hardliners in the U.S. congress,” Rouhani said, referring directly to Israel, the Saudis, and GOP lawmakers in the US.
In addition to the never-ending feud with the Israelis, Tehran is embroiled in a worsening conflict with Riyadh triggered by Saudi Arabia’s execution of prominent Shiite cleric Nimr al-Nimr and subsequent attacks on the Saudi embassy and consulate in Iran. The argument has raised the specter of an all-out conflict between the Sunni and Shiite powers and stoked sectarian discord across the region.
With sanctions lifted, Iran will now have access to some $100 billion in frozen funds and will be able to increase its oil revenue exponentially even as prices remain suppressed.
It’s easy to see why the Saudis and other Gulf Sunni monarchies are nervous. Iran plans to immediately boost output by 500,000 b/d with an additional 500,000 b/d coming online by year end. “The oil ministry, by ordering companies to boost production and oil terminals to be ready, kicked off today the plan to increase Iran’s crude exports by 500,000 barrels,” the official Islamic Republic News Agency reported on Sunday, citing Amir Hossein Zamaninia, deputy oil minister for commerce and international affairs.
“Iran could haul in more than five times as much cash from oil sales by year-end as the lifting of economic sanctions frees the OPEC member to boost crude exports and attract foreign investment needed to rebuild its energy industry,” Bloomberg reports, adding that “the lifting of sanctions means Iran can immediately boost oil revenue to about $2.35 billion a month, based on the country’s estimated current output of 2.7 million barrels a day and oil at $29 a barrel.”
Even if oil hovers between $30 and $35 a barrel, Iran will be pulling in some $3 billion a month by summer and nearly $4 billion a month by December.
"Iran's aging oil fields may present some challenges to the pace at
which it can physically raise production," Deutsche Bank wrote last year, as prior to the signing of the accord. Here's a bit more color:
Changes to Iran's sustainable production capacity in the medium term will likely depend partly on the speed and extent to which international oil companies (IOCs) invest in the development of Iran’s oil resources. Currently, 38% of Iran's oil production originates from three large fields and associated areas which began production decades ago (Gachsaran 1934, Ahwaz 1959, Marun 1965). Of the original resource contained in these three "super-giant" fields, only 23% remains now.
Further development drilling will likely be required in order to maintain production, and secondary techniques such as CO2 or associated gas injection may be required to improve the recovery rate and counteract falling reservoir pressure. Prospects for higher production would be improved by IOC participation. However, foreign investment has lagged not only because of sanctions, but also because of the government's buyback agreements which are considered unattractive.
On Sunday, Rouhani said the country needs between $30 and $50 billion in foreign investment in order for the country to hit its 8% growth target for the year. "Untapped potential in many industries indicates that domestic demand cannot solely push the economy toward eight per cent growth," he said. "Attracting foreign investment will be the best way of using the opportunity of sanctions relief to boost the economy and security."
But according to Israel, it's all a charade. On Saturday, The Times of Israel said that according to an unnamed "source in Jerusalem", the first thing Iran will do is send money to Hezbollah. "The implementation of the agreement would have a direct impact on the region, as terror groups Hezbollah and Hamas — both recipients of Iranian largesse — found themselves in possession of new and modern weaponry," The Times wrote. A statement from PM Netanyahu's office reads: "Even after the signing of the nuclear agreement, Iran has not abandoned its aspirations to acquire nuclear weapons, and continues to act to destabilize the Middle East and spread terrorism throughout the world while violating its international commitments."
We wonder whether Netanyahu would say the same thing about the Riyadh, where "acting to destabilize the Mid-East and spread terror throughout the world" is an explicit foreign policy aim.
In any event, Iran just got a $100 billion windfall and will be around $2 billion richer each month by the end of the year. The return of Iranian supply "will have an immediate impact in the spot market” Robin Mills, CEO of consultant Qamar Energy, told Bloomberg by phone. “Putting oil in the market is going to push it down." "Iran’s additional crude shipments have the potential to further depress prices, perhaps to as low as $25 a barrel,” Nomura's Gordon Kwan added on Sunday.
As for what effect a richer, more prosperous Iran will have on regional stability, we'd suggest that anything that serves to counter Saudi influence is probably conducive to a more secure environment. Besides, things can't get much worse in the Mid-East, so it's hard to see the downside.
Implementing #JCPOA not a detriment to any country. Our friends are happy & our rivals need not worry. We're no threat to any nation/state.
— Hassan Rouhani (@HassanRouhani) January 17, 2016
(17 votes)
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great news for Russian arms makers... Iran will be a great military power!! hehehehehehe
August 2014
Vladimir Putin has agreed a $20bn (£11.8bn) trade deal with Iran that will see Russia sidestep Western sanctions on its energy sector.
Under the terms of a five-year accord, Russia will help Iran organise oil sales as well as “cooperate in the oil-gas industry, construction of power plants, grids, supply of machinery, consumer goods and agriculture products”, according to a statement by the Energy Ministry in Moscow. (Telegraph)
Iran/Russia are in bed for at least 4 more years. Saud's are in a predicament.
1 dollar oil and I'm not crazy. Especially when Saudi Arabia de-pegs.
ive got an idea of how to save white people. first of all we need to convert white people to islam. it must be done quick. then we change slightly the islam and claim that saudi arabia belongs to europeans.
the there will be a war in middle east. we will use it and settle white muslim refugees in saudi arabia, wehich are now presecuted in europe by sunnis. we will give them weapons and they will kill all arabs and other muslims.
europe will collapse together with healthcare and welfare system. stpuid muslims in europe will go bankrupt and massacre each other.
we will then own the oil and claim to be the real arabs, while the retard muslims will have no oil in europe and cry everyday.
because muslims are born as social retard they wont be able to come up with a solution like our ancestors did and all muslims will die on hunger and aids.
now we establish a middle east welfare system and healthcare system. at this moment we say that islam is bad and not valid and all white people convert to judaism. as they are now jews they will just ignorantly own peninsula and oil without self hate.
and then we make that mexicans kill all the niggers in africa and blame tem later on = africa saved
dang it im a hero for saving the europeans and kill all muslims at the same time
Wow, you must really like sand in your vagina.
this is how we jews fix things. europe is cold and boring and now its full of nigger trash and feminists anyway - im not responsible for that and we better do not look back. instead its time to go forward and kill all arabs.
muslims have no right to exist on this planet and no where else except the paradise. im here to help all arabs to reach the paradise immediately by pumping 9 mm of finest lead into them and their childrens and womans heads.
It's going to be a long 48 hours ..
Best post on ZH in a long time!
Time for prpoerty tax increase , sales tax, gas tax , toll roads in Texas. Texas future looking great.
right.
When T kicks the cheap labor out, its going to get interesting in Texas
I can't see Israel stopping at that. Neither can I see them unilaterally doing anything about it. I do however see an Israeli plot to reverse all this progress using good old deceptive means we've become so accustomed to.
as a warmonger spokesman,
dont compare us to zionists.
"The argument has raised the specter of an all-out conflict between the Sunni and Shiite powers and stoked sectarian discord across the region." Thanks for catching up to the real discussion, Mr Durden. Your failure to mention the Zionist Council on Foreign Relations misses a relevant piece of the puzzle. Americans would be more sympathetic of Israel's predicament if the Zionist billionaire overlords of the American people hadn't both increased the debt to a level of 110% of debt to gdp, putting the people into perpetual indentured servitude as their serfs and printed $4.5 trillion in free cash of which they also stole from the American people. If Iran arms Hezbolah and Hamas and if all the countries of the Middle East go to war against the Israel, it is not Americans concern. Let them fight their own wars from now on. Xi's trip to the Middle East is an attempt to quell the coming CFR designed and coodinated Shiite-Sunni conflict. He maybe successful and they then may turn all their arms on the Israel and finally leave the American people alone. All of these billionaire Zionists in the US and Europe should be forced to emigrate to Israel to help them fight. Need some names, Adelson and Soros would be a good start. I can come up with many many more including the whole cabal in the CFR.
A hah h a a hahahahahahahahaa
I see $15 oil by spring.
So ummm yeah, about that PEAK OIL catastrophe? Where in the world is algore?
Getting a massage somewhere I presume.
Well I for one am thrilled.
Certainly the Iranian theocracy is chock-full of crazy, but this is why the Shah was disposed in the first place - he took away the mullahs' ability to make money.
The Persian demographics show a young society eager to embrace the West, but the Persian Bomb is a secular - nationalist - ethnic pride project - like the Moonshot.
Israel and the West had no choice but to infiltrate Iran by economic interests in order to subvert the Bomb and related delivery systems. You can only kill so many scientists.
$3-4 billion a month buys a lot of choices. China, Russia, Exxon, etc will pour billions from QE into Iran.
Curious this is happening while Aranco is sized up for an $2 trillion IPO.
Time to go find some hot Iranian women in Parsa, Alborz and Kish.
In time the price for a 42 gallon barrel for oil will be more expenses than the actual contents.
Peak Hysteria.
I thought Iran was trying to develop "peaceful nuclear energy" so they didn't have to use dirty polluting oil to save the planet.
This Iran deal just goes to show you that the global warming lie is exactly that. If Barry the butt fucker really cared about saving the planet and using renewable energy he would have forced Iran to invest in solar panels seeing how Iran has nothing but open desert to absorb all that sunlight.
Like everything Barry says is a lie, this Iran deal has nothing to do with peaceful purposes. That ticking of the clock to the countdown to war just keeps getting louder and louder doesn't it folks?
For the record I tried.
"
Six words and describes 6+ decades US foreign policy.
And geography you were schooled in US?
Laws of probability do favour this assessment.
This is correct, because sanctions and nothing to do with imaginary Iran atom bomb program.
Tried what? I am not understanding this.
Deserts are terrible places for solar farms.
Deserts tend to be very dry, and thus dusty. This dust gets on the solar panels and limits efficiency. Now, you can always wash them off reguarly to avoid this, but with what water?
You're jioking, right? MillionDollarBogus-style?
This means Solid Gold Burkas for the only Hottest of Irainian Ladies
Paradigm shift. Not in the future but right now! I just can't believe the Neocons are going to accept this laying down. God help us.
It has started: Iran sanctions: Middle East stock crash wipes £27bn off markets as Tehran enters oil war
Boobberg TV says Saudi Tadawul index is down 5.4% on Iran oil sale news.I will excuse myself from football to watch investors punt as futures open at 6pm ET
http://m.investing.com/indices/indices-futures
With demand flat to falling and Iran slated to suck up an extra 2-3 billion a month out of the whole enchilada, the question arises as to who will be most rapidly and heavily damaged by the subtraction of market share they currently hold.
Given the geographical realities of Iran's location in the world and its current delivery infrastructure, it will clearly begin eroding established market share structure in the European and Asian markets. The biggest losers, and probably in about equal measure, are going to be Russia and Saudi Arabia. US and CDN producers will also obviously suffer, but I suspect that this will be more of a price mechanism thing rather than a bulk mechanism thing.
Much of the North American output goes right into the North American market and is not massively subject to Iranian competition for market share in this area. Falling prices will of course affect all producers everywhere, but it will be a double blow to those who both lose market share and get a lower price for their remaining sales.
Its a race to the bottom pure and simple.
Reverse cartel. Next, markets reverse split.
Traditional markets for Iranian oil - India, Spain, Italy, Greece.
That makes Saudi Arabia, Libya, Azerbaijan and Turkey into biggest losers.
Good points: we will have to see which big International conglomerates get their feet in the door first, and which are US partners.
The Iranian regime is now going to make those who cautioned the Saud US axis; having mandated Saddam to attack Iran in 1980; pay for their unholy game.
History has the eyes of Nemesis in its gaze on Wahhabism's legacy; and the Arab dis-alliance will now feel the effect of the Iranian boomerang, as its got the backing of the BRICS.
This is a major turning point, with Iran no longer considered a Pariah nation, in the unwind of the neo-con Clash of Civilization game as follow on to the realpolitik that Dear Henry initiated.
Pax Britannia's "Great game" started Ottoman unwind in Balfour Declaration and the concomitant Oil politics of 1928 cartel.
Pax Americana's take over in 1945 led to 'Roll back', then 'Superpower Realpolitik' which had morped into the 'Clash of Civilization' of Huntington's NWO brew; now all being unraveled, thanks to Iran's resilience and the Greenback's hubristic over-reach in debt conundrum.
Some time-line of 60 years since Mossadegh's 1954 demise.
check out the big brain on Falak!
well done, sir.
Excellent summary of the past 100 years Falak!!!
he (or she) is probably the only commentator worth reading - if you want to stimulate the grey matter in your skull.
No, not the only one, Jack Burton is also reporting on reality.
What many oil bulls forget to consider is that oil has historically spent more time being cheap than it has being expensive. Explains they're irrational reaction when it hits market levels like we see today.
Also, the gyrations we've seen over the past 10 years are not explained by SUPPLY AND DEMAND or PEAK OIL or DOLLAR DEVALUATION. There are other forces at play and you can bet they are for the most part politically motivated.
C.A.R.T.E.L
Seven ugly sisters followed by Dear Henry's big stick and Sheikh Yamani's (remember him?) Karajanian OPEC symphony which lasted until Ronnie asked Fahd to pull the plug on it, debasing the Oil price to win the war on Soviets; and hoping to kill the Ayatollah Iranians as well under Saddam's pounding.
Bye Bye Yamani and hello WS ramp up on cheap oil's transfer of inflation to the Mike Milken junk bond / Supply side revolution.
The "dark forces" of 'Black Matter' of Higgs Boson type monetary strength; in the COUNTRY that invented "free enterprise" and " the invisible handed Hayekian market"...
Haha ! Talk about Great Ronnie's monetary collidor ! The Greenback Reserve has to take top prize in the galaxy.
Ask that to the zealous Japs who got fat fingered twice by the Plaza and Louvre accords in 1985/1987, when Ronnie decreed that the Jap MITI conglomerates powerhouse needed to recycle its Yens into Jap Real Estate and NOWHERE else...Goobye Japan Inc. Hello Japan doldrums!
Some "invisible monetary hand" thar!
We know what that did to the Jap economy.
Now the Oil chickens come home to roost in Fahd's land...
Oh Ronnie...Oh Maggie...what a madhouse your pristine monetary farm has become. Shades of Brave New world.
125 GEV Bitchez !!!
"recipients of Iranian largesse — found themselves in possession of new and modern weaponry,"" -what a joke:
Iranian military hardware ("Iranian largesse") (junk from 1950-1970) vs. Saudi hardware - NATO standard 1990-2000s:
https://en.wikipedia.org/wiki/Islamic_Republic_of_Iran_Air_Force vs.
https://en.wikipedia.org/wiki/Royal_Saudi_Air_Force and https://en.wikipedia.org/wiki/Saudi_Arabian_Army
NATO standards? You mean that highly overpriced junk they buy from Lockheed martin and Boeing - 10 times over priced and less effective than Russian hardware?
We thought we had no rivals -so we increased war spending to add in trillions of waste, largesse and fraud to enrich the crooks while tranferring the debt to Americans -based on the bogus War on Terror. Meanwhile the Russians and Chinese built good stuff - a lot of it from our best stolen technology sold to them by the Israeli's and Clintons .
You can buy into "Israeli Times" Un-biased" claims of threats from "modern Iranian weaponry" as you wish.
But the matter of fact is that the gap between most Iranian and SA hardware is 50 years before we even start looking into the sheer numbers of weaponry sold to SA in the last 20 years vs no deliveries to sanctioned Iran, when even Russia refused to ship on a signed S-300 (defensive kit) contract.
Iranians have the fighting spirit that SAs wouldn't even dream of, but Israeli claims of the Iranian superior weaponry is nothing but propaganda trick, just like that famous picture of a 5 minitus to a nuke bomb that Bibi showed to the UN GA.
http://www.defensenews.com/story/defense/international/mideast-africa/20...
"Saudi Arabia has the best equipped armed forces in the Gulf region....It is traditionally a customer of the US and British arms industries, although Riyadh has also sealed contracts with France and Germany for its navy and has bought Eurofighter jets.
The Saudi army has 600 heavy tanks, 780 light armored vehicles and 1,423 armored troop carriers.
Its air force is equipped with 313 fighter jets, including F-15s, Tornados and Eurofighter Typhoons, as well as helicopters.
Considered a priority, air defenses and deterrents include 16 batteries of Patriot missiles, 17 batteries of Shahine missiles, 16 of Hawk missiles and 73 Crotale/Shahine missile units."
"The Saudi army has 600 heavy tanks, 780 light armored vehicles and 1,423 armored troop carriers."
All manned by fierce desert warriors with unswerving allegiance to the bed sheet princes...LOL!
Oil to $10/barrel. These sand dwellers can pump oil profitably way lower than us.
More than sand...
http://www.triptopersia.com/iran-nature/geography
Maybe this is why nothing makes sense- What if the plan was for WWIII: The war was supposed to come to US soil in the form of nukes from Russia after crazies in the U.S. fired off ICBMs. Russia easily defends itself with is advanced weaponry, Russia Is supposed to fire back the fatal volley here.
What if the plan was to have Obama preside over our country's demise. What if Bibi was chosen to piss off the world to the point no one gave a shit when Isreal got glassed over?
What if they chose the Muslim Obama to be president because he is an equal opportunity hater: Christians, Jews, white males, heterosexuals, capitalism.
But what if Putin somehow got the truth and the master plan through all the censors that each country's leaders are subject to? Even if these supposed leaders already knew the plan, they would shit knowing that Putin and China know.
This is what I think is going on right now. There really are bad guys that are starting to get taken down. Plans are falling apart. The military is behind the scenes moving equipment out of harms way or preparing to defend for a ground war here. Look at the CIA site Deagle:
http://chemtrailsplanet.net/2015/04/23/deagle-forecasts-us-population-re...
- planning on massive population reduction in the U.S. Not going to happen.
US set to Nuke itself. ..and blame it on Russia.
https://www.youtube.com/watch?v=GD-VRDklIPc
Good for Iran -good for American people. We need to quit going to war with and trying to destroy iran because of israel and a few thousand rich psychpathic bankster jews who use AIPAC and the ADL to keep a bounch of largely corrupt, bought off Congressmen like McCain and Rubio and the Clinton's to serve their interests in promoting war and theft of trillions from Americans.
Currency War > Trade War > World War.
Israel hasn't kept one word of its' promises it made with President Jimmy Carter.The Orthodox Zionists who dress in black with their large hats and black beards have control of this Government in Israel. Zionists have no intention of ever giving up the West Bank.They are nothing but lying basturds.This is the true reason for war.