Iran Deal: The Effect on Global Oil Markets

14-Sep-2015

Despite last minute efforts to derail the agreement, the nuclear accord with Iran is a done deal. While generally agreeing that lifting Iranian sanctions will bring more oil to market, analysts have delivered divided opinions on the timing and effect.

When will Iranian crude reach the world market?

Thompson Reuters Analyst John Kemp reports that it will take a number of years before Iran can export oil at pre-sanction levels. Currently, Iran does have the legal right to export to certain countries. The International Energy Agency stated in June 2014 that exports had increased by 28 percent that year.

How much crude does Iran have in storage?

Many observers believe that Iran currently stores a significant amount of crude at sea but disagree on the quantity and quality that could be immediately sold to consumers. Iranian stored crude oil estimates range from as much as 51 million barrels to as little as 7 million barrels. Because Iranian crude oil storage is not publicly and reliably reported, in the absence of objective human intelligence analysts estimate storage by counting crude oil tankers and measuring how low the ships float in the water. The lower the ship the more oil it contains. Iranian officials have stated that Iran will immediately ship hydrocarbon products as soon as the sanctions are lifted. 

(by Tom Morgan, Forbes)

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