Iran Set to Increase Oil Output At Any Cost – the Hell You Say!
by Stevie McHugh
Oilfield Families of America
With international sanctions expected to be lifted possibly by spring, Iran has announced plans to accelerate oil output, no matter the price per barrel. Actions in the Middle East have flooded the world market and are largely to blame for crude prices dropping from $115 as of mid-June 2014 to $42.23 per barrel, a six-year low, which was reached Monday, as measured with international benchmark ICE Brent.
Per his ministry website, Iran Oil Minister Bijan Namdar Zanganeh announced plans to ensure that the country’s oil market share is not permanently lost. Iran’s oil restrictions have been in place since 2012. As soon as sanction restrictions are removed, output of Iran oil production is to immediately increase by 500,000 barrels per day (bpd) and another half a million bpd in the months to follow.
The world’s largest energy companies have slashed billions of investment dollars, and yet supply has been better than many have expected. The glut of oil created by OPEC’s predatory actions – Saudi Arabia’s in particular – isn’t close to being absorbed by demand, unfortunately.
Two companies have given Iran encouragement by way of promised actions to occur once the planned lifting of sanctions is a reality. Shell has announced the intent to immediately pay a $2.3 billion debt owed to Iran. BP is expected to buy Iranian oil, according to Zanganeh.
OPEC is currently pumping at record levels, in spite of a saturated world oil market. Algeria is trying to get fellow OPEC members to respond appropriately to tumbling crude prices. There has been an absence of public response on Saudi Arabia’s part, the top OPEC producer which led in the group’s commitment to continue its output target of 30 MMbpd.
Zanganeh asks that OPEC members give Iran room to reclaim market shares.
Removing sanctions against Iran makes about as much sense as continuing the U.S. ban on oil exports. There is a lot crazy in the world today but not much can top the nonsense going on in the oil industry. It’s dead wrong to sacrifice the livelihoods of the wonderful men and women who work the oilfields in the U.S.