Iranian officials have repeatedly said Iran will attempt to put half a million barrels of oil a day back on the market after sanctions are lifted.
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Iran has 10% of the world’s proven oil reserves and its oil supply will now come to market but the key question remains, as Eamonn also highlighted, is how much of this anticipated move has been a factor already in the recent oil price collapse?
“With consideration to global market conditions and the surplus that exists, Iran is ready to raise its crude oil exports by 500,000 barrels a day”, Deputy Oil Minister Amir Hossein Zamaninia was quoted as saying by the Shana news agency.
“Currently, we are studying…” Actual barrels of Saudi Arabian crude shipped to Asia are even cheaper, at $26 – the lowest since early 2002 once inflation is factored in and near levels seen before the turn of the millennium.
The Abu Dhabi Securities Exchange also slumped 4.24 percent but remained above the 3,700-point mark. Oman’s shares were down 3.2pc, the most since December 2014, and Bahraini equities edged 0.5pc down. Dubai’s DFM General Index lost 4.6 percent in the highest trading volume this year.
“Calling the bottom in a market is always a risky practice, akin to catching a falling knife”, said Michael Hewson, chief market analyst at CMC Markets.
Nigerian stocks were set to post their biggest weekly drop in a year on Friday, while Russian energy minister Alexander Novak said that the critical oil price level for domestic oil producers was $5-$15 per barrel, which amounted to the cost of production.
The index tumbled 5.4 percent to 5,520 points.
Both of China’s major stock indexes shed more than 3 percent, raising questions about Beijing’s ability to halt a sell-off that has now reached 18 percent since the beginning of the year.
“As of now, Korean companies are free to engage in trade with Iran with nearly all items, with the exception of strategic goods such as arms and nuclear-related items”, the Finance Ministry said in a statement Sunday. “We expect the Iranian economy to grow at a rate of 6 to 8 percent for several years”.
While the progressive removal of worldwide sanctions limits Iran’s return to full production capacity, additional exports to a market already well oversupplied does not bode well for prices. “Today it’s more than one million cars, it has the potential to go to 1.5 or 2 million”. That may help Israel become a regional energy hub and generate billions of dollars for the state, according to the nation’s largest investment house.
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As a result of imposing sanctions on the country’s banking system, initially the value of the shares of banks fell in the Capital Market and consequently the value of the shares of pharmaceuticals, petrochemistry and motor vehicles industries saw sharp decline, and finally the main indexes of the Capital Market dropped drastically.
