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Page added on July 14, 2015
Iran nuclear deal impact on oil markets
Iran’s oil and financial sanctions will be lifted with a phased deal struck on its nuclear program on July 14, but the market won’t immediately see more crude. The country is currently exporting around 1 million b/d of crude, less than half the 2.2 million-2.3 million b/d exported before the European Union and US imposed crippling oil and financial sanctions in mid-2012.
TIMING
The market probably won’t see any noticeable increase in Iranian crude supply until next year. Iran by October 15 must show that it has met its commitments and the International Atomic Energy Agency hopes to issue a final report by December 15. The US Congress also needs to approve the deal, although President Barack Obama earlier July 14 reiterated that he would veto any legislation preventing implementation.
HOW MUCH
The first Iranian oil release may come from roughly 40 million barrels of floating storage in the Persian Gulf. About half of this is crude and the rest condensate. Officials also think they can export an additional 500,000 b/d of crude within months of sanctions removal and then another 500,000 b/d after that.
BUYERS
Oil minister Bijan Zanganeh has said Asia will be Iran’s main target. That’s where oil demand is still growing, albeit more slowly than before. Europe, which took about 600,000 b/d before the sanctions hit, will also be a focus, a senior oil official said Tuesday. However, wherever Iran tries to sell its oil there will be challenges. Competition has increased everywhere, partly because lower US reliance on imported crude has sent former suppliers looking for new markets.
OIL SALES TERMS
Like other oil exporters, Iran sells its crude on a market-related basis and adjusts pricing from month to month. There may be room for inventiveness in other areas, such as credit terms.
OTHER BENEFITS
Once sanctions are lifted, Iran hopes to attract top international oil companies to its upstream sector to help it develop its vast reserves of oil (about 157 billion barrels) and gas (about 1,200 Tcf). Minister Zanganeh has held talks with firms like BP, Shell, Total and Eni. The country plans to launch a new new upstream contract model in December.
US OIL COMPANY INVOLVEMENT
US companies have to abide by a separate raft of US sanctions not related to the nuclear issue. A US embargo on imports of Iranian oil will remain in place.
8 Comments on "Iran nuclear deal impact on oil markets"
penury on Tue, 14th Jul 2015 10:52 am
A real piece of NADA, nothing, theatre without the actors only the clowns were there.
shortonoil on Tue, 14th Jul 2015 11:16 am
Market reaction: $1.12. If Obama had hit himself in the foot with his 3 iron it would have been more than that! This gives Israel another opportunity to have a hissy fit, and Congress an excuse to do more of absolutely nothing for another six months.
BC on Tue, 14th Jul 2015 11:55 am
This is the breakthrough agreement for the ages that the world has been waiting for to usher in a new era of global peace and prosperity.
The future is so bright that the real risk today is being blinded by the implications of an even larger oil “glut”, $20-$30 oil, full employment, declining fiscal deficits, rising wages, and 4% real GDP growth for years to come with little or no price inflation and interest rates remaining at historic lows and stock prices continuing to make all-time highs indefinitely hereafter.
Buy stocks, real estate, and Range Rover and Bentley SUVs, and have pity on the maladjusted gloomsters who just don’t get it that human desire and ingenuity conquers all and will bring about the techno-optimistic capitalist utopia humanity has been dying to achieve for centuries.
We are on the threshold of an era of untold wealth, abundance, good will, and the end of suffering for all.
Now, go forth and prosper, brothers!
Peace!
Northwest Resident on Tue, 14th Jul 2015 12:05 pm
Thanks, BC. I needed the pep talk. I feel much better now. Whew! Just to think, moments ago, I was convinced that we are in deep shit despite this magnificent diplomatic coup!
idontknowmyself on Tue, 14th Jul 2015 12:28 pm
This is about stopping the progression of China and Russian to get Iran oil for themselves. US is using the same strategy that China and Russian is using to access the last oil.
It is a tentative to install US oil companies before the Chinese and Russian access all the oil spots in Iran.
Israel is not useful to US anymore and will be dump to get access to the last reaming oil.
See this has a sign of oil depletion and scarcity.
BC on Tue, 14th Jul 2015 1:03 pm
“Thanks, BC. I needed the pep talk. I feel much better now. Whew! Just to think, moments ago, I was convinced that we are in deep shit despite this magnificent diplomatic coup!”
😀
But Idontknowmyself has to spoil it all with that geopolitical realpolitik stuff. :-\ Bloody doomsters.
Northwest Resident on Tue, 14th Jul 2015 2:22 pm
I get the impression that the world — or the people that run it — feel a desperate need for Iran’s oil. But how to get that oil, openly, when so many years and work have been invested in demonizing Iran and making them out to be the devil incarnate? Easy! Just put on a public relations stunt, conduct some “historic” negotiations to end “the threat” posed by this former member of the Axis Of Evil. And presto magic!! The ignorant masses are pacified, they now understand that Iran has reformed itself and is no longer a threat to world peace, and the oil can flow.
The charades are epic. The actors on the world stage are clowns and yes men. But the show must go on — until the theatre burns to the ground.
Apneaman on Tue, 14th Jul 2015 2:38 pm
Iran: A Nuclear Program, a Monkey in Space, No Water
“Iran, the country that American sparrow hawks have pencilled in for our next invasion and 20-year war, is beginning to die of thirst. Its government is often fighting pitched battles with citizens desperate for water, and is preparing water-rationing plans for its biggest cities including Tehran. Its new president, Hassan Rouhani, has identified water as a national security issue and has promised his people to bring it back. Nice trick if he can do it.”
http://www.dailyimpact.net/2014/01/31/iran-a-nuclear-program-a-monkey-in-space-no-water/