A historic moment for Iran. The negotiating group P5 + 1 has reached an deal with Tehran over its nuclear program . Iran sanctions will be lifted, while Iran renounces the creation of the atomic bomb. Details of the agreement are available in different sources, but we will focus on an important aspect. The lifting of economic sanctions allow Iran to export oil again. And this sudden increase in supply will cause the price of fuel down . Joy!
What will happen to oil prices?
The oil market has already reacted, with Brent in clear decline since already weeks ago.
According to the Iranian minister of interior, the country could raise its oil exports by up to one million barrels between now and six months. Iran has the fourth world oil reserves after Saudi Arabia, Venezuela and Canada. The fact is that its production was at record lows, with a farm just for domestic consumption. Crude stocks without exporting in Iran are very large, and from the country they want to make a quick exit, a market that will absorb like a sponge.
This surge in exports will flood a market already oversupplied , pushing down the price of oil ( NBC ). For now, the OPEC has not announced that there will be cuts in oil production. Although sanctions are not effectively raise until December – when the International Atomic Energy Agency issues its verdict – a barrel of oil and the lowest quote. It is said that the price could fall below $ 45.
Iran will export to a global market with excess supply and low prices.
we will have not seen such low prices for oil for many years. I remember rising oil prices after the Iraq conflict took first oil above $ 50. In a few months, prices could be much lower. Fracking in the US and Canada takes time causing global excess supply (2.5 million barrels a day), and none of the two countries plan to reduce their production. These excess supply really mean that these countries achieve self-sufficiency.
When we notice the savings at the pump?
The main market is Asia Iranian oil today, but before the sanctions was Europe. The effect on European prices will be more noticeable from year-end but from now begin to enjoy fuel prices will gradually decline. This should give us a little break for the summer and car trips. However, keep in mind that the downward adjustment in prices is always slower than upward adjustment. Nothing you can do in this regard.
The average price of a liter of unleaded 95 is 1.346 € / liter, a liter of diesel, 1,159 € / liter.
The Spanish gasoline was made in a large percentage of Iranian crude: the sanctions against Iran we suffered more than other countries, so on paper should notice a reduction in prices even higher. Do the last shall be first? However, we should not forget that Special Tax Fuels remains a fixed levy per liter of fuel – almost 40 euro cents -. And remain invariant, at least in this term of government
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