Peak Oil is You
Donate Bitcoins ;-) or Paypal :-)
Page added on November 9, 2013
Oil prices may plunge if Iran gets a nuclear deal
Oil futures bounced off an earlier four-month low on Friday, but analysts told CNBC that prices could plunge if an agreement on Iran’s nuclear program is made this weekend.
Secretary of State John Kerry unexpectedly joined the ongoing negotiations in Geneva, sparking speculation that a preliminary deal could be reached soon. Iranian oil exports have been decimated by sanctions placed against the country’s energy sector by the United States and Europe in response to its nuclear ambitions.
“I want to emphasize there is not an agreement at this point in time,” Kerry told reporters in Geneva. “There are still some very important issues on the table that are unresolved. It is important for those to be properly, thoroughly addressed.”
However, energy analysts said that Kerry’s participation—along with British Foreign Secretary William Hague, French Foreign Minister Laurent Fabius and German Foreign Minister Guido Westerwelle—is a positive sign. The dignitaries are all expected to meet with Iran Foreign Minister Javad Zarif on Friday.
“This news reinforces our existing expectation for an ‘agreement in principle’ or ‘preliminary deal’ or ‘first step,'” analyst Kevin Book of ClearView Energy Partners said in a note to clients. “We reiterate our bearish bias for Brent crude.”
Book predicted that Brent crude oil futures could fall as much as $12 if a deal is reached to remove sanctions on Iran. Those measures have kept about 1 million barrels a day of Iranian crude out of the world market.
While Brent—the international benchmark for crude oil—has topped $100 a barrel for the better part of three years, prices have slid more than 10 percent since the end of August, due in part to an easing of tensions between Iran and the West. December Brent crude futures rose slightly Friday morning after falling to a session low of $102.98 a barrel, the lowest price since July.
NBC News reported from Geneva that Kerry’s involvement in the talks is “the strongest sign yet that the first phase of a nuclear deal with Iran may be near.”
Even though such a deal would be preliminary, it’s still significant. NBC News cited an unnamed senior U.S. official as saying that any agreement would reign in advances by Iran’s nuclear program in return for a “limited” and “reversible” easing of economic sanctions.
6 Comments on "Oil prices may plunge if Iran gets a nuclear deal"
DC on Sat, 9th Nov 2013 9:10 pm
CNBC Fantasizes:Oil prices may plunge if Iran gets a nuclear deal
ROFL! Dont count on it, but it makes for good filler I guess…
nemteck on Sat, 9th Nov 2013 10:50 pm
“Book predicted that Brent crude oil futures could fall as much as $12….” Headless talker without any sense if diplomacy and politics. To lift crude oil sanctions are years away. Iran will never give up the heavy water power plant they are building right now nor allow what is called unprecedented inspections of all nuclear installations. Talks will continue for years as was before.
Clearly, if there is this “first step” deal in the next few days where few minor sanctions are lifted (only those the US president made with directive orders) oil price will fall for a few days. A hype like usual. Oil embargo can only lifted by congress.
BillT on Sun, 10th Nov 2013 3:00 am
With the cost of recovery pushing the marketable price, I don’t see any true decrease in price ever. Blips caused by manipulation, yes, long term, no.
rockman on Sun, 10th Nov 2013 12:15 pm
And once more the simple math: the KSA producing 10 million bopd at $90/bbl = $900 million/day. Producing 9 million bopd at $100/bbl = $900 million day.
Pre-sanction: KSA + Iran: 10 million bopd + 0 million bopd = 10 million bopd.
Post-sanction: KSA + Iran: 9 million bopd + 1 million bopd = 10 million bopd.
Net change after sanctions lifted: 0 bopd. Change in KSA revenue = $0/day. Change in Iranian revenue = +$90 million/day.
rockman on Sun, 10th Nov 2013 12:54 pm
Ops…forgot one other metric: at 9 million bopd the KSA keeps about $37 billion (2013 prices) worth of oil in the ground for future sales while their competitors continue to deplete their reserves. Also might need some of that banked oil to continue supplying their ever increasing population. Like rust and depletion, ELM never sleeps
bobinget on Sun, 10th Nov 2013 6:14 pm
Rockman nails fundamentals. Honest factual reporting.
Quite rightly in post such as above the author doesn’t
wander into speculation… I will.
Iraq is in a state of near chaos. While exports continue due to experienced (highly motivated by pay) welders pipe fitters, oil men, Iraq has maintained exports, despite pipeline explosions almost weekly. As the situation decays, guys connected to oil companies will be targeted by which ever side is not getting what they believe to be a fair share of oil revenue.
Libya is not exporting for the same reasons outlined.
KSA is supporting Egypt and Pakistan with crude oil
and cash.
Saudi Arabia is outwardly and unabashedly throwing more then moral support to overthrowing president Assad of Syria. Here we have the specter of the two top OPEC members, Iran and KSA,
in a virtual death spiral. In today’s language: “This cannot end well” KSA is far more concerned Iran will get hold of almost 100 BILLION dollars sequestered funds in Western banks, then Iran’s so called nuclear ambitions. If Iran can get mitts on that money, Iran will get a second wind so to speak, mounting a greater
defense of the current Syrian regime.
In many, many ways Syria’s proxy ‘civil’ war is placing the same sort of strain on Iran and KSA economies as has America’s oil wars in the Mid East.
There are now nearly four million Syrian refugees spread from Turkey to Jordan to Egypt to Iraq to within Syria itself. Needless to say these people’s needs are putting terrific strains on all concerned.
I want to stress, up to yesterday’s typhoon in the Philippines and now Vietnam, this has been the greatest concentration of refugees since WW/2.
( there are at least four million homeless on the Philippine Islands)