Posted on 11/25/2013 11:44:37 AM PST by Laurent.w
In the short term, the Iran deal will ease the political risk premium baked into oil prices.
In the long-term a gush of Iranian oil could soften oil prices enough to kill the economics of America’s tight oil boom.
Given sufficient investment in drilling and infrastructure, there are ample oil reserves in Iraq and Iran to add another 5 million bpd to global oil supplies within 10 years.
The Eagle Ford and Permian Basin and Bakken need sustained high oil prices to make the economics of expensive drilling and steep decline rates pay off.
If crude oil benchmarks were to fall to $75 a barrel and stay there for a couple months you’d see drilling rigs across Texas and North Dakota fall silent.
(Excerpt) Read more at forbes.com ...
And now we know at least one reason why Obama insisted on this turkey of a deal.
Would it lead to $2/gallon gas? Let Israel deal with the rest.
How is Iran getting a bomb with missiles to deliver same going to reduce risks to the World’s oil supply?
Ping.
There’s also a pissed-off Saudi Arabia in the mix, too.
This is a croc. There is not going to be a huge new flood of Iranian oil hitting the market......the Chinese have been buying their oil all along.
The Chinese are not going to stop using oil. So, the basic supply/demand ratio is going to stay about the same.
Very interesting. Thanks for posting.
Here’s another view on the matter that does not see a big drop in prices:
Agree with you.
This doesn’t lead to stability or low oil prices.
This leads to hot war... and all bets are off.
A radioactive, desolated, post-apocalyptic wasteland won’t produce much oil. Nor will a seething caldron of warring mooj sects consumed in genocidal blood rage.
Even if the great powers re-colonize and subjugate the savages, the oil will be pulled into two spheres, the West and the Sino-Soviet remarriage of convenience. Or one, since it seems the West no longer has the will or resources to do so.
OPEC might try one last flood of oil, trying to strangle the shale play baby in its crib, but I don’t think it will succeed.
“Would it lead to $2/gallon gas?”
It will lead to remote control nuclear weapons located in western cities that can be set off at the will of the Ayatollah. Iran is a hostage taking culture. Is that worth $2 gas?
how many solid blue cities do you think they could take out?
Also, Iranian oil is not Light Sweet Crude like what comes out of the Balkan.
I believe Iranian oil is heavy sulfur crude. It goes to a completely different type of refinery.
“how many solid blue cities do you think they could take out?”
Just one will be the crisis Obama won’t let go to waste. Obviously (for a Democrat) we’d need to cancel elections, especially if all the candidates are killed two weeks before the elections in that same incineration. Gosh, how convenient.
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