Oil Prices and the Cancellation of the Iran Deal

Discussion in 'Commodity Futures' started by bone, May 8, 2018.

  1. bone

    bone ET Sponsor

    We know that the Gulf States are fully supportive of the United States decision to pull out of the Iran Deal. While the Gulf States do not want to be seen publicly as allied with Israel, we now know that they are literally thrilled about President Trump's decision.

    Gulf Arab allies jubilant at U.S. withdrawal from Iran deal


    I would be interested to hear from ET Members on how they think this development will affect oil prices. Please don't cut and paste quotes from CNN or MSNBC or the NYT because that's useless. Literally useless.

  2. Overnight


    There is one monkey wrench in the equation...Will the higher prices lead the US to keep increasing production? Seems we can get away with lower prices per barrel to make profit than the Saudis. The US is heavy on light-Sweet, which is less expensive to refine, while the Arabs are more about the heavier grades? I guess the Baker-Hughes reports will start to have more teeth through the the next year.

    Nice to see the volatility coming back to CL.
    bone likes this.
  3. pushpop


    I think shale production can rise, however, I'm curious about the infrastructure to transport the additional crude.

    I don't aee Saudia Arabia increasing production, they are set on an $80 barrel.

    Cancellation of the Iran deal won't ease tensions between SA and Iran, and in my opinion will only increase the chances of a greater conflict within the region .

    I still see prices going higher, I believe a $64ish can/will come easliy prior to the end of the year and possibly up to $82.25.
    bone likes this.
    • Buy the rumor.
    • Sell the news.
    • Oil back to $60.00.
    BoyBrutus, fordewind and bone like this.
  4. bone

    bone ET Sponsor

    In my mind that’s much more likely on a protracted basis than higher oil prices.
  5. pushpop


    Can't edit, but the above "$64ish" should actually be a "$74ish".
  6. JSOP


    Looks like it didn't affect the market at all.
  7. bone

    bone ET Sponsor

    On April 2, 2015 the Gulf States and Israel were essentially forced to become allies and wage what has become a unified regional war against Iran. It's an open secret that the Mossad and the Saudi GID are working very closely together.

    An argument could be made that in a perverse way the Iran Deal brought stability to the region via the law of unintended consequences. Israel, Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE) banding together and working together now for 37 months and counting against a common regional foe (Iran) might mean greater peace and stability.

    My point being, if Iran wants to ramp up a nuclear and ballistic missile program, or cause mischief in the Strait of Hormuz - there now exists a serious regional military deterrence perfectly willing to take matters into their own hands.
  8. JSOP


    Having nuclear weapon is the way to go to have a place on the world stage nowadays. You can starve your own people, destroy all the resources, but if you can build nuclear weapons well everybody gives you what you want.
  9. bone

    bone ET Sponsor

    Apparently Saudi Arabia agrees with you. They released an official statement today saying that if Iran acquired nuclear weapons then they would as a counterbalance.
    #10     May 9, 2018