January 19, 2016

THE SA'UDS ARE RIGHT...:

Iran Is About to "Drown" the World In Oil (Jordan Weissmann, 1/19/16, Slate)

Say what you will about the geopolitical merits of the Iran nuclear deal: It's probably going to guarantee your gasoline will be dirt cheap for the foreseeable future. So says the International Energy Agency, which on Tuesday predicted that "unless something changes, the oil market could drown in over-supply" in 2016.

In a way, that's sort of an understatement; markets have been gagging on hydrocarbons for a while now, as global production has grown way, way faster than demand. The world's swelling glut of crude has already driven prices down to about $28-to-$29 a barrel this year, which should in turn lead to a bit less drilling--the IEA expects that, outside OPEC, the world is eventually going to pump 600,000 fewer barrels a day. But the agency also writes that "this will inevitably be largely offset by higher production from Iran," which is promising to immediately jack up its oil output by 500,000 barrels per day now that it's been freed of sanctions. Assuming the overall oil output ultimately stays rougly steady, the world could find itself producing 1.5 million more barrels of oil per day than it needs in the first half the year, leading to bigger crude stockpiles and even lower prices.  

...America and the Shi'a are conspiring against them.

Posted by at January 19, 2016 6:39 PM

  

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