Wall Street Reacts To The Lifting Of Iran Oil Sanctions
As was triumphantly announced over the weekend by both parties (making one wonder who actually benefited), after years of U.S. sanctions, Iran is now free to export as much of its oil as it wants after the International Atomic Energy Agency said the country had curbed its ability to develop a nuclear weapon leads to lifting of international sanctions. And while the end of sanctions also opens the door to foreign investors into country’s oil sector, most importantly it allows the country to flood the world with its oil. As a result the first thing the Iran oil ministry did today was to issue a notification order to boost oil production by 500k b/d.
Below, courtesy of Bloomberg, is a summary of the world's, and Wall Street's reactions, to the lifting of the Iran oil embargo.
IRAN SAYS:
- Iran beginning efforts to boost oil production, exports after removal of sanctions; targets increase in shipments of 500k b/d w/in mos.: Amir Hossein Zamaninia, deputy oil minister for commerce and international affairs
- Iran already selling more oil after sanctions lifted; ~1,000 lines of credit have been opened for banks, says President Hassan Rouhani
INTERNATIONAL RESPONSE:
- Iran deal paves way to closer energy cooperation w/ EU, will send 1st technical assessment mission on energy to Iran at the beginning of Feb., says EU Energy Commissioner Miguel Arias
- Potential areas for cooperation incl. nuclear energy, oil, gas, renewables, energy efficiency, electricity market
- Israel will monitor Iran for nuclear deal violations, says PM Benjamin Netanyahu
FOREIGN INVESTORS:
- Shell interested in developing Iran’s “energy potential,” monitoring developments w/ regard to settling outstanding debt to NICO “as soon as we are lawfully able to do so”
- Shell denies executives currently in Tehran for mtgs
- ABN Amro says Shell, Iran relationship “has been very good,” puts co. in position to be “prime partner” for Iran with lifting of sanctions; lifting of sanctions has neutral overall impact
TANKER NEWS:
- Iran oil tankers set sail under Lloyds insurance, Shana cites Ali-Akbar Safaei, MD of National Iranian Tanker Co.
- Iran oil tanker fleet yet to signal Europe as sanctions lifted: Bloomberg ship tracking
- Clarksons Platou says Iran return to mkts may boost VLCC rates by $10k-$15k/d; boosting exports to 1m b/d could lift fleet utilization of ~90% by 1 ppt
ANALYST VIEWS:
Morgan Stanley (analysts incl. Adam Longson)
- Iran oil output to rise ~600k b/d in 1H16, longer-term picture murkier given uncertain investment environment
Commerzbank head of commodities research Eugen Weinberg
- Prices to probably show “knee-jerk” reaction, dropping Monday before recovering to >$30/bbl later in wk
- “There is a real oversupply in the market, but I think that’s already reflected correctly in the price”
Qamar Energy CEO Robin Mills
- Iran oil “will have an immediate impact in the spot market”; “putting oil in the market is going to push it down”
- Iran can boost production, sales of ~600k b/d w/in 6 mos; can add 600k-800k b/d of output this yr
IHS analyst Victor Shum
- “Aggressive” increase in Iran crude exports could lead to “open market-share battle” w/ Saudi Arabia
- Nomura Holdings analyst Gordon Kwan
- Oil may drop to $25/bbl Monday on Iran sanctions relief as “additional crude shipments have the potential to further depress prices”
JBC Energy
- Iran crude exports seen increasing 450k b/d over 2016, w/ 185k b/d coming from floating storage; production will rise “by only 255k b/d over 2016 to 3.2m b/d”
- Expects “substantial increase” in exports in short term as Iran ships crude stored on tankers; does not think this sustainable; sees 14m bbl of crude, 35m bbl of condensate stored in tankers
Source: Bloomberg
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why aren't those airline tickets dropping !@#%! i need to go somewhere & the ticket i need has gone up by $600 since Sept. 2015.
http://fox17online.com/2016/01/17/no-joke-gas-is-47-cents-per-gallon-in-...
A lower oil price? Shouldn't we be cheering? After all, if wages aren't going up but necessities are dropping in price - isn't this the way things are SUPPOSED to work? More competition, more productivity equals lower prices, what's NOT to like about that?....
Yes, cheap oil in and of itself is great. What's not to like is the possible reason behind why it's getting cheap - not more competition and productivity but a deflationary drop in economic activity that will come with lots of painful defaults and job losses making cheap oil small consolation.
Of course, even that pain would be a good thing if part of a lasting correction back to market-set prices and sound capital allocations, but we know the manipulators won't tolerate that
Let gas prices go to 22 cents again.I can't get anymore unemployed than I am now.
Iran is pursuing ICBM tests.
To any rational general this would signal that they have finished building a nuclear warhead and are in the stage of pursuing development of delivery vehicles. (ie: they got the nuke, they just need a way to get it where its going).
But w.e the U.S. govt is inept and has a wet noodle for a dick because...Obama.
israel lost. go whine somewhere else.
Every Israeli heart is glad .... for the Arab Spring butchery .... now they get cheap oil .... to replace the cheap ISIS/Turkey oil .... I feel your pain .... there is no need to advertise it .... LOL ?
This is all the Zionists fault, if Israel wasn't there, everything would be peachy in the world...they should've taken Uganda when it was offered to them! Oh wait, then they'd have ended up like Rhodesia, South Africa, Southwest Africa....
If I'm not mistaken, the US pursued IBM tests as well. Who had the wet noodle out then?
OPEC/Russia just slipped .... on their own .... banana peel .... China to get cheap oil .... just in time for recession .... LOL ?
Obama is the "indirect" tax king .... Ocare, flooding refugees, huge debt, QE, strangulations (regulations) .... the only "price tax" relief we get .... is paid for by the private oil patch sector ?
Natural gas is what this is all about. Iran has the largest NG deposits in the world. But, they need western (christian know-how) to exploit the reserves. Nuclear is a bargin chip. They want LNG facilities , pipelines to europe and china. This is about market share, power and money and the Western corporations are drooling at the prospects.
NGBR .... natural gas banana republic .... like there is a shortage of natural gas ?
LNG is too expensive to compete with natural gas delivered by pipelines. We are entering a phase during which it will become temporarily difficult to finance new mega projects such as pipelines from Iran to Europe and China. In the next few years Iran will be happy to sell the oil at whatever prices they can get on the market.
The Muslims are doing to each other .... what they swore .... they were going to do to Israel .... gotta love it .... they've been "Besnookered" .... LOL ?
Tiny mighty Israel .... hoorah ?
winning a battle but losing the war
and those who gave in in this battle gave in precisely with the above in mind
Iran will have very little impact on overall export volumes. The majority of their oil is consumed internally and they peaked around 2005-2006. They may export a few hundred thousand barrels more per day than they were exporting pre sanctions. Not exactly a game changer.
By around 2020-2025, they will be extracting just enough for internal consumption which will end Iran as a net exporter. With oil prices at record lows and minimal CAPEX investment, this will occur even faster.
They have > 40 million barrels sitting in tankers right now. Anchors up and send em to market this week!
Yes, prices will be impacted...
"ordering" it and producing it are two different things
finding a Buyer is another albeit easier task
even if they were ramping up these past six months, 500K/day
aint so easy. i suspect they were ramping up shipping 250-350K bbl/d
and the proof is Gartner was long four months ago
And the loser is -- PUTIN!
Ha. He buddies up to the Iranians. They jump right back on the export game. They fuck Putins economy (further).
I thought Putin was a "chess player"? Everybody says he is sooooo smart and working behind the scenes to get what he wants. Well then, why didn't the Iranians suffer some sort of "accident" or some other mishap that kept them from dumping tens of millions of oil on an already oversupplied market thereby CRUSHING Putins economy?
Chess player... Right ... Sure.
Putin's best interest is in a flooded oil market. Think about it. USA and Europe, financially stressed to the max. Just read on ZH today that Italy banks are in a free fall, and they banned short sales. Italy lost over 2 billion dollars being USA's grocery clerk to deliver sanctions against Russia. Germany lost double that. France got stuck with a couple of high end floating heli pads as well when they dumped the contract with Russia due to US pressure. Not Russia's fault. Follow the USA to bankruptcy. No better way than to keep oil at $20. a barrel. Wall St. is 20% invested in the energy business. Putin did not do this to the US. The corrupt US let it happen to themselves. USA =debt to GDP 108%. Russia debt to GDP, about 17%. Who's the smarter one? Yes, Russia's economy is struggling. But they are better positioned for the long haul. So what's Putin supposed to do in this case? You didn't say.
All right, guys. I'm going to do something I don't DO, and unload a Foreseeing in public: Saudi Arabia as we know it has roughly five years left. The current King and his powerful Defense Minister son who doesn't know jack about staying out of wars too expensive to win, will lose power to an internal coup which will be forced to give way to a semi-democratic state with many more hands in the political pile. This may come as the result of economic collapse or military defeat, although probably both will be involved, as will the continuing tension with an Iran that has just won the ability to openly compete with them in the business of oil oligopoly. Oh joy! After 1-5 years of cheap, cheap oil, we will be hit with a sudden tightening that will crash our own economy into the ash heap of yesterdays.
Pity whoever wins the Presidential election. The ball will drop on their watch. Vet Vice-Presidential candidates carefully. Death of the next President in office is highly probable, whether from stress-related heart attack, assasination, or suicide. And needless to say, store gold, food, and lead in safe places. And don't depend on a gasoline-powered generator for emergency power.