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Page added on December 11, 2014
Iran: Fall in oil prices is ‘treachery’
Iran’s President Hassan Rouhani said Wednesday that the sharp fall in global oil prices is the result of “treachery,” in an apparent reference to regional rival Saudi Arabia, which opposed production cuts.
Oil prices have plunged by more than 40 percent since June to around $65 a barrel, placing severe strain on Iran’s economy, which is already hobbled by international sanctions imposed over its nuclear program. An OPEC meeting last month failed to reach agreement on production curbs, mainly because of Saudi opposition.
Rouhani told a Cabinet meeting Wednesday that the fall in prices is at least partly “politically motivated,” the result of a “conspiracy against the interests of the region, the Muslim people and the Muslim world.” His comments reflect concerns among Saudi Arabia’s rivals that the kingdom is capable of withstanding the revenue losses and is forcing lower oil prices to damage their economies.
“Iran and people of the region will not forget such conspiracies, or in other words, treachery against the interests of the Muslim world,” he said.
Sunni Saudi Arabia and Shiite Iran are longtime rivals that are fiercely divided over the civil war in Syria, where Iran and Russia support President Bashar Assad while Saudi Arabia backs the mainly Sunni rebels fighting to topple him.
OPEC controls about 40 percent of the world oil market and Saudi Arabia, the largest oil exporter, produces nearly 10 million barrels a day – a third of the OPEC total. Riyadh has thus far refused to go along with Iran, Russia, Nigeria and Venezuela, all of which heavily rely on petroleum exports and want to drive prices up. Saudi Arabia maintains it is opposed to cutting production because of fears its market share could erode.
OPEC’s failure to agree on production cuts accelerated the decline in the price of oil, which was already sinking in part because of weak global economic growth and a U.S. oil boom that has swelled supply.
15 Comments on "Iran: Fall in oil prices is ‘treachery’"
shortonoil on Thu, 11th Dec 2014 6:57 am
Definitely “treachery”; the laws of physics are conspiring against us!!!!
We’ll have to get the UN to look into this! But for a plan B, we would advise that you try working on getting used to lower prices. You know how long it takes these bureaucracies to get around to doing anything!
http://www.thehillsgroup.org/depletion2_022.htm
http://www.thehillsgroup.org/
Makati1 on Thu, 11th Dec 2014 7:40 am
I see next year is going to be very exciting. “Chaos” is definitely the word for 2015 and probably for the next 85 years. I’m not involved directly and I am glad. I would not want to be 30-50 with family now.
paulo1 on Thu, 11th Dec 2014 8:16 am
Iran can always close the ‘Straits’ after it builds new infrastructure on the Gulf of Oman.
Or, since their selling dick right now, shut the Straits immediately and spread the pain around.
I would imagine a few ‘freedom fighters’ bombing a few pipelines in KSA would also do the trick. They all seem to hate each other, anyway, and this could be a Shia poking a Sunni. Double the gain.
I am only a bit sarcastic with this. Desperate people do rash things and KSA might want to think about unintended conequences. I don’t think US would ‘have their backs’ on this one.
Kenz300 on Thu, 11th Dec 2014 8:18 am
Lower oil prices are causing risky shale, tar sands and deep water plays to be reevaluated. They will not be funded at these prices…… that will so the growth of oil supplies…….
Lower oil prices will help consuming countries by lowering their oil expenses and leaving consumers with more money to spend on things other than oil products. This will help countries recover from the Great Recession, increase world GDP and ultimately lead to higher demand for oil.
Enjoy the lower oil prices while they last……
Now that Iran, Russia, Venezuela and Nigeria are all hurting they will become more likely to support oil output cuts in their own countries.
KSA will eventually cut production….. they just will not do it alone……..a little pain for Russia and Iran will make them more cooperative.
Oil producing countries should use this time of low oil prices to cut the subsidies they provide in their countries. This will help to balance their budgets and it will help to reduce wasteful consumption patterns.
bobinget on Thu, 11th Dec 2014 11:15 am
Rhetoric like “Treachery”, “Politically motivated”
“Conspiracy against the interests of the region, the Muslim people and the Muslim world.”
Where I come from, them’s fightin words brothers
and systers.
These two OPEC members have been AT WAR for three and a half years. I’m not throwing the big ‘W’
word around carelessly either.
In the past I’ve always ended these posts, concerning the Syrian proxy civil war with a jocular
like: ‘What could go wrong?’
Now, with 62 new nations in the field, most folks can already see what went wrong if they would bother to look.
Respectfully I must disagree with shortonoil once again over future oil prices. I’ve been commenting
on energy on-line now for 18 years and still shudder at some of the predictions in made in print.
Posters who make oil price predictions are doomed to regret them.
Mike999 on Thu, 11th Dec 2014 11:36 am
Cut oil subsidies???
– Not with a Repub/Exxon Government.
Perk Earl on Thu, 11th Dec 2014 1:46 pm
“Posters who make oil price predictions are doomed to regret them.”
What actually happens when a prediction turns out later to be inaccurate? Not much really. For starters everybody knows a prediction is simply a subjective guess, so not much is put on it being right or wrong.
But we also learn from predictions. For example, Simmons was convinced future oil price would skyrocket. It didn’t and he lost his bet, but we all learned that oil price can’t just go up, up, up, because ultimately all those daily millions of barrels of oil has to be sold at a price that is affordable.
The affordability price is declining as the net energy available from a barrel of oil descends, as conversely the price of oil needs to be rising to make profitable more expensive sources. With this recent price decline those two prices have passed in the night. Sure, lower oil price will stimulate more economic activity, but the price will not rise sufficiently again, IMO, to tap all marginal sources.
We are in the process of being separated from future oil resources as much of what is estimated to be producible will remain in the ground. In fact, as each month passes more of what was thought to be producible gets added to what will remain untouched.
My prediction has not changed since oil dropped in price from 147, when on TOD I put forth that oil price would never exceed 147 a barrel in 2008 dollars again. Since then the affordability price has been declining while the cost of new supply has been rising, reflecting declining net energy.
My apology if this is getting redundant.
Perk Earl on Thu, 11th Dec 2014 2:59 pm
Well, I don’t know if it’s ‘Treachery’ or not but get this;
WTI -1.05 to 59.89
Brent -.50 to 63.74
http://www.bloomberg.com/energy/
bobinget on Thu, 11th Dec 2014 3:07 pm
I’m beginning to understand your point(s) .
Perk Oil and Shortonoil.
However: (you knew that was coming)
While America’s economic recovery is proceeding apace, I believe our anemic recovery has more to do with factors other then forced austerity.
I’m gonna mention hydraulic fracturing, super computers, horizontal drilling that flooded the market with cheap natural gas and now oil.
Those with short memories should look up last winter’s temps in the Mid-West and North-East.
Ask yourself, how would this ‘recovery’ faired
with $11 and $12 natural gas?
How much would have food prices gone up in a double digit NG environment? (drying, fertilizer, power price etc.
IOW’S we really never ‘celebrated’ cheap gas only punished producers with single digit spot prices.
Just getting a huge percentage of coal burning shut down was well worth ‘fracking’ growing pains.
In a twelve buck gas environment coal burning would have increased… I’ll bet.
Now, we face a utterly ridiculous, fabricated crisis
of oil prices far to low for ultra deep water, oil sands, or Arctic exploration.
Which of course brings up ‘climate change’, proxy wars, real global wars, population overload,
economic, climate, religious hatred, unpaid debt,
food distribution, worst refugee problem since WW/2.
All these ‘factors’ can, in the comfort of a heated home in North America be looked at academically.
If you are a Nigerian living under flaring night and day, scrapping for every morsel, you could be excused for not getting nuance surrounding Saudi Arabia’s Monarchy need to crush Iran, Russia, perhaps, apostate Venezuela to boot. It’s not about money, we should understand that.
Perk oil’s ‘predictions’ are better then educated guesses. The problem it seems, are unexpected
oil soaked swans.
Makati1 on Thu, 11th Dec 2014 6:23 pm
Perk, America is NOT in recovery. It is only using bigger lies to cover the decline. Incomes are now lower then in 1990 in real terms. Nothing is higher except debt and the Stock Market numbers. When did you first start thinking in trillions? I bet it was when the US started using those numbers to describe it’s debt.
China now has the fastest super computers by 50% or more.
Fraking has a NET EROEI that barely makes it a positive energy source.
Nat Gas is a bubble that is about to burst also, when the financial system crashes, likely before 2020.
It’s ALL about money and the resources that provide it. Nothing else. All else is cover-up/distraction. The Saudis need it to keep their heads, literally. The Empire needs it to finance its wars. We need it because that is the system we now all live under. Money make this chaotic world go round … for now.
Davy on Thu, 11th Dec 2014 8:16 pm
Mak, did you know 45% of super computers are in the US and only 12% in China
Perk Earl on Thu, 11th Dec 2014 8:37 pm
“Perk, America is NOT in recovery.”
Mak, I missed the part where I stated that.
Speculawyer on Fri, 12th Dec 2014 2:50 am
Sunni v. Shia war means cheap oil for the rest of the world! Yeah!
Makati1 on Fri, 12th Dec 2014 7:04 am
Yes, Davy and most are tied into the Stock Market Casino. We cannot even send supplies to the space station without help. How many bullet trains does the uS have? ZERO! China?
“High-speed rail (HSR) in China may refer to any commercial train service in China with an average speed of 200 km/h (124 mph) or higher. By that measure, China has the world’s longest HSR network with over 15,448 km (9,599 mi) of track in service as of December 2014,[1] including the world’s longest line, the 2,298 km (1,428 mi) Beijing–Guangzhou High-Speed Railway.[2]”
How about a growing economy? China: Yes. USSA: No.
How about foreign reserves? China: ~$4 trillion. USSA ~$135 BILLION.
Foreign Debt: China $3 trillion. (34% GDP) USSA: $18 trillion. ( 106% GDP)
And on and on…
Davy on Fri, 12th Dec 2014 7:24 am
Mak, I don’t deny your propaganda cherry picking but they are nothing more than a method of lying about the truth. I see it as a cognitive dissonance of your failing super heroes called Asia and the brics. My point is everyone is descending including your super heroes. My other point is carrying capacity levels will ultimately trump all else. Brazil and Russia have a chance but Asia is toast.
You have never answered the 25 Trillion China question. You haven’t because you can’t. This system wide Chinese mal investment and corresponding bad debt component will never be paid for just like American suburbia and strip mall culture.
Russia may or may not survive this oil price collapse. Oil prices will need to recover for Czar Putt to win the war. He is losing all the battles now. The bumpy descent may end any recovery of oil prices. If oil prices do not come back Czar Putt may be removed for making a bad wager.
Mak, this is a case of you promoting horses that are not winning. You are a propagandist and a nervous one at that. Nothing is working out for you. So you become more and more caught up in you fantasy and deception to the point where you are ridiculous.