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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I'll be interesting to see if the Saudi royals meet the same fate as other USSA allies who outlived their usefulness.
This looks to me like the PTB are laying the groundwork for the end of the petrodollar and replace it with something like SDR or electronic currency.
The Iran oil news has to be worth 1000 INDU points down, and $25 crude, within days:
http://finviz.com/futures_charts.ashx?t=CL&p=m1
It is already factored in, the market looks ahead.
Can anyone explain how RBOB can go negative as it did in 2009 and pre 2005?
http://finviz.com/futures_charts.ashx?t=RB&p=m1
why dont we give them 4B a month to keep their oil off the market so our economy can recover
I like it, exactly the same as .gov buying and destroying livestock during the great depression to keep prices up. Logic at its finest.
Israel is getting that.
I see thousands of temporary (long term) layoffs.
Remember 1986? Don't think I'll be moving to Texas for a job anytime soon.
Peace, commerce, and honest friendship with all nations, entangling alliances with none.
Screw anyone who tows the anti Iran propaganda. How is it we are always the good guys even though we go commit atrocities clandestinely to other countries and act shocked when they turn against us.
the missing piece of analysis here is iran's oil is the sweetest in the world. they get a little premium because it is so sweet(clean, easier, less expensive to refine).
a lot of customers have always preferred iranian oil. japan(now china) was their biggest customer before sanctions. the other oil producers will suffer a bit. iran will have no problem selling their oil.
the other unmentioned data point is iran has the biggest gas field in the world. that is why they are so important to russia and china. that is why they are so important to the usa. the usa has apparently tired of the useless israelis and the saudi oil leverage by reestavlishing iran as the power fulcrum in the mideast.
Iranian light is sweet like Libyan or Algerian.
Iranian heavy is sour.
I don't know what their projected export breakdown currently is.
Next 90 days will see a collapse with 40+% of the US/Canada oil industry. I mean by gone, out of business.
rouhani must read zh, or he should. he succinctly laid out what the rest of the world knows. the zionazis are the embodiment of evil.
i wish i could see nutandyahoo rage at this turn of events. he is dangerous. he is going to kill a lot of americans in a last ditch effort to become relevant again.
nuke israel for peace in the mid east and the world.
This is exactly what my grandfather said about bringing peace to ME in his last years.
He was a platoon commander in Palestine in 1946-47.
The Jews of today are not the Jews of 1947. They have the will and the means to retaliate.
BTW, my late father, rest in peace, was in Palestine in 1944. At that time, all the "Palestinians" were Jews.
Imagine that!
Is lifting sanctions against Iran predicated upon verifying their oil exports are denominated in US petrodollars? What is the objective, what does it mean if that is not the case?
I'm hoping this will bring back a new era of big block muscle cars.
I wanted to get a license plate frame for my guzzler that says, "Kiss Another Dinosaur Goodbye".
Well that didn't take long. Less the 24 hours after sanctions are lifted on Iran. The Zionist control Dept. of Treasury imposes new sanctions on Iran for ballistic missle test.
https://www.rt.com/usa/329240-us-sanctions-iran-ballistic/
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I am so ƒµç?¡?? sick and tired of you Jew-hating, conspiratorial whack-jobs here, on INFOwars, and everywhere else.
ZH is a great site, but of late, you nut-jobs have just appeared all over it.
You defeat yerrselfs with your own lack of logic!
If the world is controlled by the great Zionist conspiracy, they’ve done a ?ï$$???? job at it, haven’t they!?
The Iranians are free to develop their nukes! They’ve got their oil to sell now.
The Zionists control the media, the movies, the banks, et cetera, ad nauseam. And the TD now?
What don’t they control in your mind?
All the hatred directed to the Jews, and to me, they don’t seem to be doing such a great job of controlling it, or managing this great control, now do they? Why can’t they shut it down?
Because they don’t control squat, the way you imagine it.
Just shut up. Take your ridiculous, paranoid hatred and crawl back under the rock from whense you came.
•?•
V-V
And no, I’m not a Heb.
Most people in general seem to be content on blaming the ills of the world on the Jews and I am with you on this one.
Barrry isn't one and he sure fucked up the state of things.
the 4 big power structures of any .gov are: the media- zionazi jews own all six of the major masm outlets and the biggest internet outlets. they control the message.
money- zionazi jews own the major banks and the fed. they control who wins and loses in the business world by controlling who gets the money
law-zionazi lawyers and judges have the ability to change laws to their liking. they decide who wins and loses in court. they have the ability to change laws to their liking. how many jews are there on the supreme court? from 2% of the population?
.gov- not only are the zionazi jews over represented in national .gov as elected officials the number of zionazi jews in the most important bureaucratic institututions like the state department is no secret. in fact, there is a great story, bragged about by themselves, about how they changed the arabist state department into a zionazi .org. one only has the read about the pnac and the neocons to see that one instance. they are all over the justice department decideing who gets prosecuted or who doesn't. why do you think they are so reluctant to throw banksters in jail.
your view is ignorant. the anti zionazi crowd is informed.
A deceased family member was a ME DOS diplomat. He was an arabist. In those days there were few zionists-jews in the DOS-particulaly in the ME section--because obvious concerns about im-partiality. Nowadays there are NO real WASPs left at DOS. None as Arabists. None on the Russian/EE desk either. All the Russian experts at DOS are jews. Mostly those who emigrated from USSR in the 70's, 80's and 90's. Many with dual Israeli citizenship.
Working at DOS is the kiss-of-death to ANYONE who wants a real career in foreign service. Better to work in Tel Aviv. Or Brussels. But unless your're a jew, a jewish woman or black -- don't bother.
Henry Ford knew the score.
"Because they don’t control squat, the way you imagine it." Well, that might be true to some extent. 1) read Controversy of Zion, by Douglass Reed, 1956, a senior correspondent for the London Times.
The issue is not the degree of success, it is the mess they create in trying. The objective is to shut down the machinations of the conspiracy, root them out and flush them down the toilet.
kinda useless rambling
er... get a GED THEN rewrite that rant
Wishful thinking .... my Joos must be delirious .... the Arab Spring flesh mulcher continues ..... in THEEEE "Islamic Nation" .... LOL .... more oil means lower prices .... and less revenue .... let the bidding begin .... me happy ?
I haven't been this happy .... since MLK was shot ?
Tyler, What does the crash in oil prices do for Petordollar Recycle? Is the petrodollar now dead or will be in the near future?
Look at the gold/oil ratio and you have your awnser.
http://www.macrotrends.net/1380/gold-to-oil-ratio-historical-chart
Well, I just sent a letter to Iran thanking them for keeping down gas prices. I also thanked them for adding more oil which will help to bring about the defaults that will take down the entire fraudulent western banking system. But in the meantime, I asked if they can get the price of motor oil back under $2.00 a quart, because it's gone up as oil has gone down. Can't figure that out. Simple requests, simple results. Oh, and asked if they could tip me off when they are going to launch the nukes, so I have time to get the popcorn ready.
hey that's an interesting question will a nuke blast pop my pop corn for me? not that i will be around to care, but trivia is important...
Heads up everyone getting your own money back is a "windfall". Stealing billions is called "doing gods work"
Cyprus, Greece, asset forfieture etc.. crazy world.
Apply a little math here guys.
According to readily available numbers, the "glut" in oil
amounts to 2% /day. Got that? 'Cuz that means the
combined "glut" of the last 2 ( TWO ) years amounts
to about 14.6 DAYS!
If y'all didn't just have a WTF moment, perhaps you should
go read the funnies. That is Correct. The World Wide oil
glut amounts to 14.6 days of world wide consumption...
Given that Iran's oil was already shipping to Russia
and China, ( which last time I checked is part of
"world wide" oil consumption ), what will this new found
supply of oil do? Add another .4 days to the "glut"???
Hey buster, we're trying to get off on the doom porn here!
Please do not confuse us with facts.
Oh yeah. That.
Sorry, My apologies.
Although, how the FED financing the commodities
rout is going to end well, hardly rates as Shirley Temple type stuff...
Once the festivities start and Iran can pump better the price will skyrocket as usual. Glut lol. Just a few firecrackers to go off. It isn't like any surcharges have gone away. The new ones will be a banger when oil is at 200
Exactly, this glut means 14 more days of oil in supply, which should make people question the narrative that, "oil is just not as profitable folks so we'll have to lay you off, sorry."
The economy has turned really nasty due to:
The cold
The heat
Those storms
Those darn terrorists
name your line of BS
Its all bull, gasoline and diesel are basically a waste product from the refining process. They make way more on the chemicals side
The entire thing is a manipulated farce
So now Iran and Saudi Arabia can have a "gas war" instead of a shooting war or both.
Will oil go to $10 a barrel?
more bad news for oil bulls :) that money sounds too easy to me ... gotta be a catch
When the deal was done,Russia made sure the WHOLE world knew about it - the Zionist/US have already started to RENEGE and the WHOLE world will know about that too - Russia has found it's global media voice.
Whatever Zionism is supposed to mean, what it actually means is that a false d o c u m e n t called the Balfour Declaration gave real estate that did not belong to Britain to atheist Khazarian gentiles, posing as Jews, who have never had the right to any of that land, regardless that the name 'Israel' was cleverly selected to call it, in order to dupe millions of Christians around the world. WWII was created for the specific purpose of establishing a headquarters as close to the newly discovered oil fields in the Middle East and to disrupt all governments in the region and seize the oil, and 'Israel' is that headquarters, doing exactly that !
Get ready for $5/barrel. This thing is going down hard.
Iran has highly devoloped FREE plasma energy - They probably figure (correctly) that once the ME oil is gone they can finally live in FUCKING peace !
Then why have they been making deals for nuclear energy with Russia??
Where is this plasma energy generation plant?
Who built it?
Where are they going to find 4 * barbarous relic's from now then?
just out of curiosity, who is Iran going to be selling all this oil to?
i mean, the market can't use all the oil that's being produced now, hence the current market price...
.."who is Iran going to be selling all this oil to"
Anyone that won't use petrodollars as payment.
Exactly, this glut means 14 more days of oil in supply, which should make people question the narrative that, "oil is just not as profitable folks so we'll have to lay you off, sorry."
The economy has turned really nasty due to:
The oil crash
The cold
The heat
Those storms
Those darn terrorists
name your line of BS
Its all bull, gasoline and diesel are basically a waste product from the refining process. They make way more on the chemicals side. Since the beginning they used the byproducts in Fertilizers, pharmaceuticals, plastics, textiles - you name it.
The entire thing is a manipulated farce
But don't worry, they'll find a scapegoat to send your children, nephews, neices, brothers and sisters to war.
Must be an echo in the room. I swear you belched your same words out before, periods and all. Do you always think nobody cares about what you utter?