Iran’s nuclear deal could open oil flood
Iran, the U.S. and its allies are pushing ahead with talks over a nuclear deal that would change many things — perhaps none faster than the price of oil.
Iranian exports in recent years have been essentially capped by Western sanctions aimed at pressuring Tehran over its nuclear ambitions. A deal easing those sanctions could eventually translate into half a million barrels or more in Iranian crude heading into a currently glutted global market, analysts estimate.
With global crude prices already under pressure, a deal could quickly knock them lower. U.S. oil prices slumped to a six-year low Monday on fresh signs that supplies are swamping the market.
Some traders cited the resumption of talks between Iranian and U.S. officials this week as a fresh excuse to bet on a further decline.
“What happens with Iran is important because of the direct impact on oil supply,” said David Hufton at London brokerage PVM.
While a deal is far from certain, Iran’s Oil Minister Bijan Zanganeh said Monday that the country could double its exports quickly.
“In case the international sanctions against Iran are lifted, one million barrels a day will be added to the country’s crude-oil production and exports in several months,” Mr. Zanganeh was quoted as saying by his ministry’s news agency Shana.
Source: MarketWatch – Iran’s nuclear deal could open oil flood
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