In sideway with Iran’s strategy to boost up its Crude Oil export and OPEC’s decision of high volume production, Oil prices have reached a lowest target since year 2009.
*Brent Crude (LCOc1) is down below US$ 37/barrel at 3.4% for the first time since year 2008 and benchmark West Texas Intermediate (CLc1) has fallen below US$ 35/barrel at 2.5%.
Since beginning of this month, when Organization of the Petroleum Exporting Countries abandoned its output ceiling, both benchmarks have fallen every single day. In the past six sessions, they have shed more than 13% each.
Keeping in view the above scenario, Iran’s deputy oil minister, Amir Hossein Zamaninia states the county to be not likely altering its strategy in increased shipments – even as Crude Oil prices shrink.
“Almost the entirety of added supplies in 2016 will come from Iran, Iraq and Saudi.” – Morgan Stanley analysts’ research note
Similarly, Tehran (currently exporting 1.1. million barrels/day) is looking forward to double its Crude Oil exports by counting on international sanctions over its nuclear project to be taking a start-up in the initial month of 2016.
Russian Minister, Anton Siluanov cited a concern predicting hard times in year 2016 by saying that Crude Oil prices could fall off at US$ 30/barrel causing a low rate throughout the year. While, Deputy Finance Minister, Maxim Oreshkin expressed Russia to draw up plans comprising price fluctuating between US$ 40 and US$ 60 for future years to come – till year 2020. This surely won’t be a pleasant implication for Organization of Petroleum Exporting Countries to deal with as it goes far beyond devastating North Sea producers, Brazil’s off-shore projects, and heavily indebted Western producers.
Last week report laid forward by The International Energy Agencyadded to the concerns as it warned the global oil glut to persist at least until late 2016 with oversupply and slowing demand.
Brent Crude traded less than 50 cents above the lows last seen during year 2008 financial crisis of US$ 36.20/barrel. If Brent falls below that level, it will be its lowest since mid-2004 – when talk of a commodity super-cycle was only beginning.