Glut fears heightened as Iran sanctions lift, Oil lowest since 2003

By FXStreet FXStreet (Mumbai) – The IAEA on Saturday confirmed Iran has adhered to its commitment and has curtailed its nuclear programme. Following the confirmation by the UN nuclear watchdog, the US lifted the sanctions imposed on Iran. Iran has the fourth largest proven oil reserves in the world and it is also one of the biggest exporters of crude. The sanctions had slashed Iran’s export by 2 million barrels per day (bpd), reducing to around 1 million bpd. With sanctions removed Iran’s oil exports will climb again to its pre sanction highs choking a market already hit by glut concerns. Iran said yesterday that it is ready to increase its exports by 500,000 bpd.

The rise of US shale producers and OPEC’s stubborn policy to keep pumping record volumes in order to defend market share has caused prices to plunge to record lows. With the sanctions removed, Iran will begin pumping and exporting to its full capacity, which will go to add to the existent 1 million barrels a day of over supply which has caused oil prices to drop more than 70 since the middle of 2014. Global crude production is estimated to have already exceeded by between half a million …read more

Source:: FX Street