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Iran return to western oil markets fearmongering

News Peak Cheap Energy and Oil Price Slump Recommended Links Energy Bookshelf Secular Stagnation Energy returned on energy invested (ERoEI) A note of ERoEI decline
MSM propagated myth about Saudis defending this market share Deflation of the USA shale oil bubble Oil glut fallacy Why Peak Oil Threatens the Casino Capitalism The Role of Pro-Israel forces in US Iran Policy Who’s Turning Syria’s Civil War Into a Jihad?  
Energy Geopolitics Ukraine: From EuroMaidan to EuroAnschluss Russian Ukrainian Gas wars The fiasco of suburbia Fiat money, gold and petrodollar The Great Stagnation Big Fukushima Debate
Casino Capitalism Inflation, Deflation and Confiscation All wars are bankers wars Why Peak Oil Threatens the International Monetary System Financial Quotes Financial Humor Etc

Bloomberg (like most other US MSM) consistently use fear mongering about Iran oil that soon will flood the market. And provide only selective quotes from Iran officials and no facts about their industry and fields.

I do not trust such reporting. Iran probably want and can sell condensate that they already accumulated and were unable to sell. After that we get into pretty much unpredictable situation. They want to get rid of it and there are buyers for it in Japan and elsewhere. With proper discount.

Do they have buyers for their additional oil (if any) at the price they want with no additional discounts (they explicitly stated that there will be no additional discounts). If yes, then how quickly they can rump up the production and their transportation network ? With investments from whom? China? Russia?

If it is so easy to rump up production, why they did not do this in 2010-2013 when prices were much higher and both china and india were buying their oil.

Saudis will not give them their quota in the current circumstances when they already burned so much cash for preserving it and diplomatic relations between countries are broken.

I would love to embrace OFM’s hope that the U.S. will be able to improvise, adapt, and overcome the ever-growing challenges stemming from declining availability of economically extractable resources and the overtaxing of industrial civilization’s by-products’ sinks…but I am afraid that as ‘the economy’ continues to decline due to humanity’s over-extension, increasing numbers of armed demagogues may try to take advantage of the situation.

Steven Mufson noted "Obama’s foreign policy goals get a boost from plunging oil prices" (Washingtonpost, Dec 23, 2015):

Plunging crude oil prices are diverting hundreds of billions of dollars away from the treasure chests of oil-exporting nations, putting some of the United States’ adversaries under greater stress.

After two years of falling prices, the effects have reverberated across the globe, fueling economic discontent in Venezuela, changing Russia’s economic and political calculations, and dampening Iranian leaders’ hopes of a financial windfall when sanctions linked to its nuclear program will be lifted next year.

At a time of tension for U.S. international relations, cheap oil has dovetailed with some of the Obama administration’s foreign policy goals: pressuring Russian President Vladi­mir Putin, undermining the popularity of Venezuelan President Nicolás Maduro and tempering the prospects for Iranian oil revenue. At the same time, it is pouring cash into the hands of consumers, boosting tepid economic recoveries in Europe, Japan and the United States.

https://www.washingtonpost.com/business/economy/as-crude-oil-prices-plunge-so-do-oil-exporters-revenue-hopes/2015/12/23/ed552372-a900-11e5-8058-480b572b4aae_story.html?hpid=hp_hp-top-table-main_oil-910pm%3Ahomepage%2Fstory

Access to 100 billion previously frozen is nice and will help to upgrade their oil infrastructure "in a long run" as well to by some modern air defense systems. But with that amount of cash in hand why they are so pressed to sell their strategic resource at rock bottom prices? They are better diversified the Saudis and sanctions helped too increase this diversification.

I am wondering why BBC and other MSM are pushing this event so hard in the direction of increasing "oil glut". This this pure colonial greed? During the latest OPEC meeting Iran was one of the countries that was for cutting output, not increasing it.

Iran has already access to growing markets in Asia, especially India and China. As for European market the question that BBC did not eve try to answer is "To whom can they sell their oil without undercutting Saudis?" So why Europe makes any sense at all to them. I would let Saudis to waste their resources as long as then can. Stupidity should be punishable.

Saudis recently even tried to kick out Russia from Polish oil market, by undercutting their price despite the fact that they have a pipeline, so transportation costs are much lower. Their behavior is really strange, as if they to get rid of oil as fast as they can is the primary goal of the new king and his "Margaret Thatcher of Saudi Arabia" neoliberal son, who wants to privatize everything in sight. In was actually the son which got Saudis in Yemen civil war.

I think Iran might be able to sell their condensate to Japan at huge discount, and may be a couple of other Asian countries able to process it, but that's about it.

Before sanctions were imposed on Iran in 2012 (to keep Israel as the top dog in the area) "the top destination for Iran's crude oil exports in the six months between January and June 2011 was China, totaling 22% of Iran's crude oil exports. Japan and India also make up a big proportion, taking 14% and 13% respectively of the total exports of Iran. The European Union imports 18% of Iran's total exports with Italy and Spain taking the largest amounts.

Sri Lanka and Turkey are the most dependent on Iran's crude exports with it accounting for 100% and 51% of total crude imported, respectively. South Africa also takes 25% of its total crude from Iran."

http://www.theguardian.com/news/datablog/2012/feb/06/iran-oil-exports-destination

 


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[Oct 17, 2017] Trumps tough talk on Iran could end in a big, blame-evading dodge

Effect of Trump move on energy market remains to be seen... Might well be another step toward fiscal collapse...
Notable quotes:
"... Better refresh. The United States is by definition, an empire. Has been since December 10, 1898. Not all empires have or have had emperors. At least, as an official title. We even still possess a few de facto colonies, Puerto Rico being the most populous. The Philippines were part of the American empire from December 10, 1898 to July 4, 1946. ..."
"... The Philippines' colonial history has been described by one historian as "500 years in a convent, followed by 50 years at Disneyland." ..."
"... This is the result of our long string of wars since Reagan took on Grenada. Then Bush in Panama. And on and on until today. We've chosen to do battle with small weak countries that don't have a hope in hell of winning or even inflicting major harm. ..."
Oct 13, 2017 | www.theguardian.com

-> Ponderbelle , 13 Oct 2017 02:21

Saudis bought 15 billion dollars antirocket system. Its one deal only. Just to get Trump to stop messing around and crash the Persians they also bought Russian system.

, 12 Oct 2017 23:32

"A peculiar pattern of Trumpian behavior is emerging. First, his fragile ego forbids him to ever take responsibility for anything. Ever. Second, because he craves the adulation of his base, he will to shift blame or throw any and all supporters and allies under the bus."

He also has a tendency to want to take revenge for any imagined or real slight that bruise his fragile ego. Not a statesman or leader by any strength of the imagination.

-> ghstwrtrx7 , 12 Oct 2017 22:51

The good news is that ALL empires, throughout history, have fallen. Looking forward to the fall of the American Empire.

-> Fred Fawcett , 12 Oct 2017 22:46

Yes laughable and tragic all at the same time. Even the guy whose nickname actually is "Mad Dog" (James Mattis) has gone on record with some intelligent comments on why the Iran nuclear deal should be kept in place.

I'm not surprised you got so much hate on that comment board. The Neo-Nazis seem to loiter where they know they can get away with crap that isn't monitored properly.

, 12 Oct 2017 20:45

US citizens who believe they're 'victims' of a 'deep state' have no idea how their war-mongering nation is viewed abroad...

-> lefttheleft , 12 Oct 2017 18:25

He's the best shot that the USA becomes truly 3rd world.

-> Rigobertus , 12 Oct 2017 17:25

Trump is the antidote. You may not like it but he's the best shot at pulling the USA from the brink of ruin.

-> Abigailgem , 12 Oct 2017 17:20

America's been piling on the bad karma since Vietnam. It could well cause the world egregious trauma, but no one will shed a tear when the beast is brought low by its episodic-tho-predictable bouts of cluster-fuck. Methinks they've hit the Big One.

And aren't its politicians infinitely grateful for a citizenry so simply and quickly distracted by Hollywood shenanigans (as awful as they are in this instance) whilst a) 3 million of its own have been blown into third world living standards; b) 528 took a bullet from a shooter in the span of less than 10 minutes; and c) Californians are being roasted alive in the latest indication that something's gone screwy in our biosphere? The Oaf and Chief considers Weinstein as nothing more than relief.

Riddle: What's the difference between a President and a leader?

A: There shouldn't be difference, but now there is.

-> GatesOfRome , 12 Oct 2017 16:08

Iran is a danger to the region and the world.

I know enough of Iran to respectfully disagree. In many respects, Iran is similar to China, 30 years ago. Under the right leadership, it has the potential of becoming an economic engine for the South-West Asia, helping economic growth of itself and many of its neighboring countries.

Iran has a well-educated population that does not like the US, mainly because of the past US behaviour both in their country and in the surrounding region. The people there revolted against a US-installed government and used religion as a unifying ideology. Now they should be left alone to sort out the problems that religion has brought to them.

In case of China, Napoleon Bonaparte is quoted to say:

Let China Sleep, for when she wakes, she will shake the world

As the journal Economist once suggested, it is also better to leave the Persian Lion alone. Indeed, the Bonaparte's quote can be restated to apply to Iran; it could read:

Let the Persian Lion Sleep, for when it wakes, it will never live like a sheep

For those interested in military mind-set, it is worth mentioning here that Afghans and Iranians are in fact the same people and approach war and fighting in the same manner. The difference between the two is the cunning and sophistication of the latter.

, 12 Oct 2017 14:53

Mr. McLean's analysis is largely on the mark. Indeed much of it is supported by Mr. Trump's behavioral pattern, which has been witnessed by the world public during the past 11 months. There is, however, an area where - like many others - Mr. McLean tries to play safe. When he says::

But he promised his loyal base, Fox News and Steve Bannon, he would dump the accord

he is apparently leaving out an important - and probably the most critical - constituency of Mr. Trump. When Mr. McLean says:

He has Bannon and Breitbart howling on his heels, along with most of the rabid rightwing noise machine.

he is getting close; but, then then he shies away from identifying who are the people behind that "rabid rightwing noise machine.".

Many believe that Mr. Trump decisions are influenced by this "rabid rightwing machine" more than anything or anyone else. He has been reported to call many of the machine's "operators" after hours, from the WH as well as his Mar-a-Lago palace, in every opportunity he gets. As examples of the power of this machine, they refer to its ability:

1. To undo the harm of Pope Francis condemnation of candidate Trump, clling him "not being Christian", after his pledge to deport undocumented immigrants and build a wall between US and Mexico. The machine undermined Vatican's moral authority by overnight flooding of the world media with the old story of Pope John Paul II having a close relationship with a Polish women;

2. To pump out billions of dollars into the US futures market on the night of Mr. Trump's election victory to reverse its steep drop of almost 1000 points .

Now the "rabid rightwing machine" wants US decertification of the nuclear treaty with Iran. Mr. Trump is a businessman and no doubt understands how transactional relationships work. He is indebted to this machine, and has to reciprocate its favours in order to receive more of the same in future. Note that he has already registered as a canadidate, to be re-elected the US president for his second term!

-> Durangotang , 12 Oct 2017 11:43

And the US did not attack North Korea?

-> GatesOfRome , 12 Oct 2017 05:23

Iran is a danger to the region and the world.

The facts don't support this assumption. Clearly and without a doubt by far the most dangerous, the most destructive, the most deadly player in the region has been the United States. This fact is indisputable to the sincere.

-> Daniel Berg , 12 Oct 2017 05:15

Better refresh. The United States is by definition, an empire. Has been since December 10, 1898. Not all empires have or have had emperors. At least, as an official title. We even still possess a few de facto colonies, Puerto Rico being the most populous. The Philippines were part of the American empire from December 10, 1898 to July 4, 1946.

The Philippines' colonial history has been described by one historian as "500 years in a convent, followed by 50 years at Disneyland."

, 12 Oct 2017 05:02

Trump makes a big medicine show of cancelling "the worst deal ever" (Man! Trump can go from 0 - Hyperbole in no time flat, eh?) but that's easier said than done. The United States simply cannot arbitrarily walk away from the deal. Not legally. Aside from that Trump no longer enjoys the support of the GOP to cancel the agreement.

Oh! Make no mistake. These very same Republicans were all for walking away from the deal when Obama made it and they didn't control all three branches of government (although I'm not sure who or what controls the executive at the moment). Now that they do, having nothing but years of obstructionism to bring to the table, the GOP, lacking any governing skills whatsoever, is as impotent as ever and tearing itself apart from the inside besides.

I tell ya'. The GOP, already severely weakened by the Koch Brothers'-funded grassroots Tea Party movement, may very well just not survive the cancer of Trump.

-> GatesOfRome , 12 Oct 2017 04:50

Again, not the topic. The question is asked: Is Iran in compliance with the Joint Comprehensive Plan of Action? The answer, of course, is yes. Trump's entire domestic and foreign policy decisions appear to be based entirely on if Obama had anything to do with it, then it has to go. Bad or good. Right or wrong . This is not a viable method of sound government. It is petty, however. Childish and puerile, to say the least.

At any rate, if Trump renegades on this deal as he has on so many since he's been in office, then it will be the United States which will be in noncompliance with the treaty and it will be the reputation of the United States which will suffer yet another blow delivered by none other than our Buffoon-in-Chief.

Besides, Iran is not the only other nation muckraking about in the region. There are other players in the game. I hear rumors of another, more powerful, more destructive, far more deadlier entity stomping about the place, making a mess of just about everything. Been doing it for decades now. Just keeps making matters worse.

-> Fred Fawcett , 11 Oct 2017 22:37

I know it's sexy to blame Rethugs for everything, but American wars against weak countries didn't begin with Reagan. From the halls of Montezuma...

-> phubar , 11 Oct 2017 21:38

North Korea might just decide that it's own best interests would be served by selling Iran a working bomb. With Trump's sanctions interfering with North Korea obtaining oil, Iran might just pay the tab that way. The world could very quickly become a much more dangerous place because of Trump's antics.

-> ID4752094 , 11 Oct 2017 21:32

Israel is probably mentioned because Netanyahu is an active partner in Trump's war on the Iran Deal.

-> zolotoy , 11 Oct 2017 21:25

This is the result of our long string of wars since Reagan took on Grenada. Then Bush in Panama. And on and on until today. We've chosen to do battle with small weak countries that don't have a hope in hell of winning or even inflicting major harm.

With each new painless war the American people have been conditioned to believe that because it hasn't caused personal suffering that war is somehow painless. Now we've worked our way up to North Korea and Iran. Both of them a whole different ball game. War with either or both would likely result in a return of the draft.

Trump's scumbag supporters would quickly be singing a different tune as soon as they found themselves being forced to participate.

-> Stranger1548 , 11 Oct 2017 21:09

Well said.

[Oct 17, 2017] For War Hawks, Iran Deal Dump Is Music to the Ears

As one commenter aptly said: " 'Moron', as Tillerson would say." and as another noted "Don the Neocon.. We can keep the military in the end-stateless, goal-less, sinkhole known as Afghanistan for decades, STILL subsidize the defense of rich EU and Asian countries, fight the latest "Al Qaeda offshoot" everywhere on the African continent but we can't afford universal healthcare like US welfare baby Israel or about every other developed country, or restore power or drinking water in a US territory."
Notable quotes:
"... the question is, who are these people all excited about Iran? Other than politicians who may be working for foreign lobbies? ..."
"... This is pure lawlessness. We are breaking an agreement and by advocating regime change against a govt that has not attacked us or even threatened us in a serious manner are breaking the U.N. charter. ..."
"... Screw Trump. I mean really, screw him. He got my vote because I thought he was going to first crush ISIS and then get us out of the Middle East. Instead he's intensifying nearly every aspect of our Middle East entanglements. ..."
"... Now he's creating a new mess of his own. And this crap he's pulling with Iran is for Saudi Arabia and Israel. America First really? ..."
"... Of all of the Obama-era foreign policy decisions Trump could pull back, he's hell-bent on crushing one of the only good ones. I'd be shocked if he has even an elementary understanding of the agreement. "Moron", as Tillerson would say. ..."
"... "Cotton is one of the biggest Israel money guys in the Senate, if not the biggest. Really whopping contributions – "the Swamp" personified. In return for Israel money he has tirelessly pushed the core Israeli policy of hostility to Iran, so much so that it hardly makes sense to think of him as an American senator anymore." ..."
"... It appears that Trump's strategy is to insult and ruin Ran's economy to the point where he can get Iran to do something that will allow him to declare war against Iran because they attacked us. ..."
"... And how many countries has Iran invaded in the last 200 years? And how many countries has Israel invaded in the last 80 years? ..."
"... We will really find out who the Swamp creatures are now. Any congressman or Senator who votes for new sanctions against Iran – a country that poses virtually no threat to the United States – exposes himself as a bought-and-paid-for tool of Saudi Arabia and the jihadist fanatics the Saudis support. ..."
"... it's less that Trump wants to undo what Obama did and more that he wants to do what Netanyahu wants. ..."
"... Any notion of American excellence has now been erased. Our country will not soon recover all that Trump has tossed away and as citizens, we cannot absolve ourselves from blame. We have elected the most odious leader in our history and have allowed (mostly) a Republican Party to participate in government without having made a single contribution to the welfare of the American republic. Cotton is not alone in his folly that dismisses all real national interest. Like others, there have been many times I have despaired at the state of affairs in our Country, but this is different. Trump and his vandal allies I believe have inflicted permanent and irreversible damage to our country. Joe F , says: October 13, 2017 at 5:07 pm One follow up to earlier post: with this action, Trump has proven beyond doubt that the Mullah regime in Iran is a far more trustworthy nation than the United States. Well done Donald ..."
Oct 13, 2017 | www.theamericanconservative.com

Fran Macadam , says: October 13, 2017 at 12:48 am

Making war in other people's countries is what an American government captured by globalist financial elites is all about. For elites, such wars, paid for by the deplorable ordinary Americans they loathe, have no downside and carry no risk to them. Lose-lose for the American public is win-win for them, they cannot lose, especially since wars that can't be won will never end, perfect profit streams.
80 Percent Polyester , says: October 13, 2017 at 5:39 am
"Cotton was among the fiercest and loudest opponents of the agreement before it was made, and he has continued to look for ways to sabotage it."

Cotton is one of the biggest Israel money guys in the Senate, if not the biggest. Really whopping contributions – "the Swamp" personified. In return for Israel money he has tirelessly pushed the core Israeli policy of hostility to Iran, so much so that it hardly makes sense to think of him as an American senator anymore.

He's more like a member of the Netanyahu government who somehow ended up in one of Arkansas's US Senate seats.

Early To Rise , says: October 13, 2017 at 5:58 am
Does anyone here know any real Americans who are pushing for this policy against Iran? My family and friends are nearly all real Americans, and not one of them has any interest in ending the deal with Iran. Most of them wish we would get out of the Middle East altogether.

So the question is, who are these people all excited about Iran? Other than politicians who may be working for foreign lobbies?

Christian Chuba , says: October 13, 2017 at 7:16 am
This is pure lawlessness. We are breaking an agreement and by advocating regime change against a govt that has not attacked us or even threatened us in a serious manner are breaking the U.N. charter.

We are doing this while condemning other countries for not following a 'liberal, rules based world order' (whatever that is, oh, wait, it is following Caesar's decrees). Our Hubris will catch up to us, whether it will be by the Almighty that the Haley's and Cotton's claim to serve or just the law of reciprocity, I don't know. No one is more blind than those corrupted by power.

John Quincy Adams, "But she goes not abroad, in search of monsters to destroy She well knows that by once enlisting under other banners than her own, were they even the banners of foreign independence, she would involve herself beyond the power of extrication The fundamental maxims of her policy would insensibly change from liberty to force . She might become the dictatress of the world. She would be no longer the ruler of her own spirit."

He was able to see this because we were not yet intoxicated by power.

Everything Must Go , says: October 13, 2017 at 8:01 am
Screw Trump. I mean really, screw him. He got my vote because I thought he was going to first crush ISIS and then get us out of the Middle East. Instead he's intensifying nearly every aspect of our Middle East entanglements.

Now he's creating a new mess of his own. And this crap he's pulling with Iran is for Saudi Arabia and Israel. America First really?

Frederick Martin , says: October 13, 2017 at 9:38 am
Of all of the Obama-era foreign policy decisions Trump could pull back, he's hell-bent on crushing one of the only good ones. I'd be shocked if he has even an elementary understanding of the agreement. "Moron", as Tillerson would say.
Fred Bowman , says: October 13, 2017 at 10:14 am
What seem to be missing here is anybody talking about Israel nuclear capability. That's the "dirty little secret" that nobody talks about. Imho, as long as Iran is in compliance the deal should. Of course Trump and the Hawks in Congress are going to do everything to scuttle it and bring about a war with Iran which will end up being a World War and will necessitate the US returning to a military draft to fight this war. It will be a sad way to "wake up" America to what is being done militarily in their name. But perhaps when they see their little "Johnny and Jill" marched off to war, they'll see what has been done in these endless, unwinnable wars in the Middle East.
AR complaint , says: October 13, 2017 at 10:31 am
[Tom Cotton gets] "Really whopping contributions – "the Swamp" personified."

He got a $700,000 check from a single Israel donor in 2014. You think anybody in Arkansas not named "Walton" can match that? No sir. Tom Cotton does what Israel tells him to do. Scuttle the Iran deal? No problem.

It's time that my fellow Arkansans did for Tom Cotton what those upstanding Virginians did for Eric Cantor back in 2014, and for the same reason: we want our government back from corrupt politicians working for foreign interests.

SDS , says: October 13, 2017 at 11:53 am
I second EVERYTHING said above by all –
Steve Waclo , says: October 13, 2017 at 11:53 am
" the president made clear over the summer, he didn't "believe" Iran was in compliance and would not certify again."

Wait, what?! What does Trump know that the IAEA has been unable to learn and at the risk of compromising intelligence sources, why has he not shared that knowledge? As with many of the man's "beliefs", such attitudes do not make issues remotely true. We don't need to stir the Iran pot, for goodness sake. Has not this man kicked enough hornets nests around the world?

Stephen J. , says: October 13, 2017 at 11:58 am
I believe the "War Hawks"are leading Trump into another war. Therefore, I asked on: February 4, 2017 Will There Be War With Iran?
http://graysinfo.blogspot.ca/2017/02/will-there-be-war-with-iran.html
Steve in Ohio , says: October 13, 2017 at 12:35 pm
"Cotton is one of the biggest Israel money guys in the Senate, if not the biggest. Really whopping contributions – "the Swamp" personified. In return for Israel money he has tirelessly pushed the core Israeli policy of hostility to Iran, so much so that it hardly makes sense to think of him as an American senator anymore."

Cotton is wrong on this issue, but he's hardly a Swamp politico. He understands the dangers of mass immigration and looks likely to replace Jeff Sessions as the leading immigration hawk in the Senate. Unfortunately, I suspect he has presidential ambitions and being pro Israel is a must in GOP primaries.

Rand Paul, on the other hand, like his dad, is good on foreign policy, but doesn't get the immigration issue. People like me who want a non interventionist FP and low immigration seldom have candidates that believe in both to support. I had high hopes for Trump, but he seems to have too many generals around him telling him the wrong things.

the times they are a'changing , says: October 13, 2017 at 1:23 pm
"Cotton is wrong on this issue, but he's hardly a Swamp politico. He understands the dangers of mass immigration and looks likely to replace Jeff Sessions as the leading immigration hawk in the Senate. Unfortunately, I suspect he has presidential ambitions and being pro Israel is a must in GOP primaries. "

No it's not. It was a litmus test for the old neocon Establishment GOP, and it's gone the way of Eric Cantor. You have to go to New York, DC, or some left coastal city to find anyone who gives a goddamn about it, and those places don't vote Republican anyway.

Politicians who take the Israel dollar care about it a lot, naturally. And Cotton's near the top of the list.

jk , says: October 13, 2017 at 2:04 pm
Don the Neocon.. We can keep the military in the end-stateless, goal-less, sinkhole known as Afghanistan for decades, STILL subsidize the defense of rich EU and Asian countries, fight the latest "Al qaeda offshoot" everywhere on the African continent but we can't afford universal healthcare like US welfare baby Israel or about every other developed country, or restore power or drinking water in a US territory.

"NO KIN IN THE GAME": STUDY FINDS MEMBERS OF CONGRESS WITHOUT DRAFT-AGE SONS WERE MORE HAWKISH"

https://theintercept.com/2017/10/11/congress-war-hawkish-policies-study/

That explains "lifetime bachelor" Graham's behavior!

Kent , says: October 13, 2017 at 3:09 pm
To our neocon friends:

1. Even though Iran and Iraq are 4 letter words and share the first 3, they are very, very different animals. Iran is an industrial state of 85 million capable of designing and building effective rockets. It is highly unlikely the US can defeat Iran in a conventional war on its own turf.

2. Even if we did defeat them, there is nobody there yearning for American style pseudo-democracy. While they are not perfectly happy with their own government, they'll be dammed if they're going to accept one from us. So you'd have to put millions of American troops in harms way against the civilian population essentially forever.

And a note on the President. I don't believe he knows or cares a thing about Iran or their capabilities. What he does know, after watching Fox News for the last 8 years is: Obama bad. So the only reason, I'm certain, that Trump cares about this is because it was an Obama initiative.

Robert Charron , says: October 13, 2017 at 3:34 pm
It appears that Trump's strategy is to insult and ruin Ran's economy to the point where he can get Iran to do something that will allow him to declare war against Iran because they attacked us.

And how many countries has Iran invaded in the last 200 years? And how many countries has Israel invaded in the last 80 years?

As I recall we made a regime change in the Iranian government when we had the CIA along with the English intelligence by replacing the elected Prime Minister of Iran with the despotic, tyrannical Shah.

As an American, Trump has desecrated our flag with his flat out lies, not the NFL athletes who simps knelt during the National Anthem.

simon94022 , says: October 13, 2017 at 3:54 pm
We will really find out who the Swamp creatures are now. Any congressman or Senator who votes for new sanctions against Iran – a country that poses virtually no threat to the United States – exposes himself as a bought-and-paid-for tool of Saudi Arabia and the jihadist fanatics the Saudis support.

Let them be counted!

Ollie , says: October 13, 2017 at 4:26 pm
No president in history has been more feckless and reckless than Trump. The danger demands that the 25th amendment be asserted.
Why Does The Heathen Rage? , says: October 13, 2017 at 4:49 pm
"So the only reason, I'm certain, that Trump cares about this is because it was an Obama initiative."

I've heard this before, but if it were true than why is Trump helping the Saudis wreck and starve Yemen? That was an Obama initiative too. That's why I now think that it's not really the Obama connection so much as the Netanyahu connection that drives Trump. In other words, it's less that Trump wants to undo what Obama did and more that he wants to do what Netanyahu wants.

Joe F , says: October 13, 2017 at 5:05 pm
Any notion of American excellence has now been erased. Our country will not soon recover all that Trump has tossed away and as citizens, we cannot absolve ourselves from blame. We have elected the most odious leader in our history and have allowed (mostly) a Republican Party to participate in government without having made a single contribution to the welfare of the American republic.

Cotton is not alone in his folly that dismisses all real national interest. Like others, there have been many times I have despaired at the state of affairs in our Country, but this is different. Trump and his vandal allies I believe have inflicted permanent and irreversible damage to our country.

Joe F , says: October 13, 2017 at 5:07 pm
One follow up to earlier post: with this action, Trump has proven beyond doubt that the Mullah regime in Iran is a far more trustworthy nation than the United States. Well done Donald
Liam , says: October 13, 2017 at 5:21 pm
Regarding the 25th amendment option: how far down the line of succession must one go to find someone who has solid, bona fide cred to stop this inanity?
picture window , says: October 13, 2017 at 5:45 pm
The Economist today opines that Xi Jinping has more clout than Donald Trump.

And I read on TAC that Trump is p***ing away our wealth and power doing favors for Israel and Saudi Arabia in the Middle East, like scuttling the Iran deal and picking fights with the Iranian government. And I conclude that the reason that the Economist may be right about Xi Jinping is because Trump is doing what I read about in TAC, wasting our time, blood, money, and focus on appeasing a bunch of goddamn foreigners in the form of the Israel and Saudi lobbies.

Pretty damn grim.

[Oct 17, 2017] Rerry on attempt to destuct Iran economy by blocking purchases of oil from China and India

Oct 16, 2017 | www.moonofalabama.org

karlof1 | Oct 15, 2017 5:22:59 PM | 12

In the final days of the Iran Deal negotiations, August 2015, I completely missed the interview Kerry did with Reuters, https://2009-2017.state.gov/secretary/remarks/2015/08/245935.htm that Mercouris parses for his detailed article proving the Outlaw US Empire's Imperial Policy is now "irrational"--utterly I'd say since for me it's been irrational for decades when weighing the actual interests of the United States's populous. The key excerpt:

"But if everybody thinks, 'Oh, no, we're just tough; the United States of America, we have our secondary sanctions; we can force people to do what we want.' I actually heard that argument on television this morning. I've heard it from a number of the organisations that are working that are opposed to this agreement. They're spreading the word, 'America is strong enough, our banks are tough enough; we can just bring the hammer down and force our friends to do what we want them to.'

"Well, look – a lot of business people in this room. Are you kidding me? The United States is going to start sanctioning our allies and their banks and their businesses because we walked away from a deal and we're going to force them to do what we want them to do even though they agreed to the deal we came to? Are you kidding ?

"That is a recipe quickly, my friends, for them to walk away from Ukraine, where they are already very dicey and ready to say, 'Well, we've done our bit.' They were ready in many cases to say, 'Well, we're the ones paying the price for your sanctions.' We – it was Obama who went out and actually put together a sanctions regime that had an impact. By – I went to China. We persuaded China, 'Don't buy more oil.' We persuaded India and other countries to step back.

"Can you imagine trying to sanction them after persuading them to put in phased sanctions to bring Iran to the negotiating table, and when they have not only come to the table but they made a deal, we turn around and nix the deal and then tell them you're going to have to obey our rules on the sanctions anyway?

"That is a recipe very quickly, my friends, businesspeople here, for the American dollar to cease to be the reserve currency of the world – which is already bubbling out there .." (Bold italics in original.)

[Oct 17, 2017] Trump Decertifies Iran Deal, Vows New Sanctions by Jason Ditz

The immediate costs of decertification for the USl include the loss of the trust of allies, increased tensions with Iran, and much greater skepticism from all other governments. It also create additional difficulties the next time America wants to negotiate a major international agreement as some countries will view the USA as a rogue nation which is unable to keep its word. If decertification leads to the U.S. breaching its obligations under the nuclear deal, as seems likely, that the costs will increase even more, and so will the chances of war with Iran.
It might well be that Trump made a step increasing the probability of his removal from the current position by cabinet members.
Looks like Trump focus on appeasing a bunch of foreigners in the form of the Israel and Saudi lobbies.
Pretty damn grim.
Oct 13, 2017 | news.antiwar.com

President Trump started his long-anticipated anti-Iran speech by complaining about the 1979 hostage situation. What followed was an increasingly fantastical and absurd accounting of Iran's history, before finally announcing he is decertifying the nuclear deal for "violations," and announcing new sanctions.

The allegations against Iran went from things that happened a generation ago to treating things like the specious "Iranian plot" to attack a DC restaurant as not only the government's fault, but absolute established fact. Beyond that, he blamed Iran for the ISIS wars in Iraq and Syria, repeatedly accused them of supporting al-Qaeda, and claimed Iran was supporting the 9/11 attackers.

The allegations were so far-fetched by the end, that even President Trump appeared cognizant that many won't be taken seriously. Later in his speech, he insisted that the claims were "factual."

When addressing "violations" of the P5+1 nuclear deal, Trump similarly played fast and loose with the facts, citing heavy water claims that are really more the international community's violation than Iran's (Iran was guaranteed an international market for the water, but after Congress got mad the US has refused to buy any more, meaning Iran's totally non-dangerous stock grew), and accusing them of "intimidating" inspectors, insinuating that was the reason there aren't investigations at Iranian military sites.

In reality, Iranian military sites are only subject to investigation in the case of a substantiated suspicion of nuclear activities, and there simply are none. The IAEA has in recent days clarified multiple times that they don't need or want to visit any military sites right now. The only allegations about the sites are from the Mujahedin-e Khalq, which has been the source of repeated false accusations in the past.

And while this was supposed to be a speech about the nuclear deal, Trump closed it off with comments that very much sound like his goal is regime change, saying Iran's people want to be able to interact with their neighbors (despite Iran being on very good terms with most of its neighbors already), and suggesting that whatever he's going to do will lead to "peace and stability" across the Middle East.

[Oct 14, 2017] Trump Is Signaling an Unprecedented Right Turn on Foreign Policy by John Feffer

Notable quotes:
"... The Washington Post ..."
"... By handing off any real decision to Congress, [Trump] can avoid having to make a hard decision himself. And by picking a fight with Corker, he has a scapegoat if his supporters grow frustrated with a lack of action in Congress. It seems plausible that Trump's allies are simply being prepared for another legislative failure. ..."
Oct 14, 2017 | fpif.org

For Trump's critics, including virtually all Iran policy experts at the moment, this attempt at scuttling the world's most sophisticated arms control agreement sends absolutely the wrong signal to Iran. Trump is essentially saying, "It doesn't really matter whether you have adhered to the letter of the agreement, we're still going to break our commitment because, honestly, we just don't like you. And by the way, you can't count on the United States to keep its word in the future."

Trump is sending an even more damaging message to the rest of the world: "We as a country suffer from mood swings so severe and delusions so enduring that we can no longer be a responsible member of the international community."

After deep-sixing the Trans-Pacific Partnership and pulling the United States out of the Paris climate agreement, the Trump administration is making good on this one campaign promise even as all the others stall in Congress or the courts. Trump will make America First even if it means going against obvious American national interests, even those defined by the Chamber of Commerce.

This is not the first time that other countries have witnessed the political instability of the United States. But in the past, some underlying continuity provided a measure of reassurance to other countries. Voters might choose vanilla or chocolate, but the world still expects in the end to get some variety of ice cream.

What makes the Trump era different is the lack of that underlying continuity.

... ... ...

It's not just the North Koreans. The democratic world, for instance, found the transition to the George W. Bush years particularly bewildering. Even before the attacks of September 11, 2001, the Bush administration announced that it wouldn't implement the Kyoto Protocol on global warming. After the attacks, the administration broke with international law by embarking on a "preventive" war, violating the Geneva Conventions on treatment of captured combatants, and engaging in torture. The administration also backed away from the Rome statute establishing the International Criminal Court in May 2002 and withdrew from the Anti-Ballistic Missile Treaty with the Russia in June 2002. All of these actions profoundly troubled America's allies.

... ... ...

In other words, even with its sharp turn toward unilateralism, the Bush administration held to a bipartisan consensus in favor of multilateral initiatives that benefit the United States. In some ways Bush offered only a variation on the Clinton theme of "a la carte multilateralism" in which the United States picks and chooses the international structures with which it wants to cooperate.

This kind of Bush-style unilateralism wrapped in a-la-carte multilateralism has returned to the White House. It's represented by most of the top administration officials involved in foreign affairs: Secretary of State Rex Tillerson, Pentagon chief James Mattis, and National Security Advisor H.R. McMaster. These are the so-called adults in the room .

But Trump is something different. And that's what has thrown Republicans like Bob Corker (R-TN) into a tizzy.

... ... ...

Bob Corker is not a moderate Republican. He has an 80 percent ranking from the American Conservative Union for 2016 (by comparison, Susan Collins of Maine clocks in at 44 percent). He's no softie on Iran, either. Last year, he continued to try to pile on additional sanctions against Iran. Ultimately, he had to content himself with an extension of the Iran Sanctions Act for another 10 years. During the presidential campaign, Corker advised Donald Trump on foreign policy and was even in the running for secretary of state.

Corker is cut from the same cloth as Rex Tillerson. They're conservative Republicans who believe in "America First." But they're also committed to preserving a measure of professionalism, if nothing else, when it comes to U.S. foreign policy. They want to preserve U.S. alliances. They want to advance the interests of the U.S. Chamber of Commerce.

They're not isolationists, and they're not exactly internationalists either. They occupy the right wing of the underlying foreign policy consensus that encompasses the think tanks, lobby shops, and mainstream media in DC. They play ball whether it's a Democrat or a Republican in the White House and whichever party controls Congress. They are part of the continuity in American foreign policy that transcends the elections.

So, when Bob Corker takes aim at Donald Trump, it represents a serious breach not just within the Republican Party but within the foreign policy establishment. Over the weekend, Corker charged that Trump was making threats toward other countries that could send the United States reeling toward "World War III." Later, Corker tweeted in response to Trump, "It's a shame the White House has become an adult day care center. Someone obviously missed their shift this morning." Having decided not to run for re-election, Corker is now free to speak truth to power.

... ... ...

So, why pick a fight with Corker just when the president will need him most on the congressional battle over any new Iran sanctions? Writes Adam Taylor in The Washington Post :

By handing off any real decision to Congress, [Trump] can avoid having to make a hard decision himself. And by picking a fight with Corker, he has a scapegoat if his supporters grow frustrated with a lack of action in Congress. It seems plausible that Trump's allies are simply being prepared for another legislative failure.

In other words, it's all about the war that Trump and his still-loyal lieutenant Steve Bannon, assisted by UN ambassador Nikki Haley, have declared on the "deep state." They want to dismantle the foreign policy establishment that has presided over America's engagement in the world. A progressive might find much to rejoice in this attack, given that America's engagement with the world has often been through war and corporate penetration. But the establishment is more than that, and Trump/Bannon also want to unravel everything of diplomatic and humanitarian value as well.

John Feffer is the director of Foreign Policy In Focus and the author of the dystopian novel Splinterlands .

[Oct 13, 2017] Trump threatens to rip up Iran nuclear deal unless US and allies fix 'serious flaws'

If Washington takes action without consulting its allies, the alliances could fray.
Oct 13, 2017 | www.theguardian.com

Trump says he will not recertify deal but stops short of pulling out entirely President says US participation 'can be cancelled by me at any time'

... ... ...

For European diplomats seeking to salvage the JCPOA, the days leading up to Trump's long-awaited speech were a roller-coaster. Initially fearful that Trump could immediately trigger a possible collapse of the deal, the Europeans were buoyed when they were briefed that Trump would not call for the reimposition of sanctions by Congress .

However, in the wake of the president's speech on Friday, the JCPOA's survival looked tenuous.

In the speech, Trump declared: "I am directing my administration to work closely with Congress and our allies to address the deal's many serious flaws so the Iranian regime can never threaten the world with nuclear weapons."

He noted that congressional leaders were already drafting amendments to legislation that would include restrictions on ballistic missiles and make the curbs on Iran's nuclear programme under the 2015 deal permanent, and to reimpose sanctions instantly if those restrictions were breached.

However, any such changes would need 60 votes in the US Senate to pass, and Democrats are high unlikely to give them their backing. Even if they did pass into law, the restrictions would represent a unilateral effort to change the accord that would not be acceptable to the other national signatories.

Hours earlier, the US secretary of state, Rex Tillerson had acknowledged that it was very unlikely that the JCPOA agreement could be change, but suggested that the issue of Iran's ballistic missile programme and the time limits on some of the nuclear constraints in the deal, could be dealt with in a separate agreement that could exist alongside the JCPOA.

[Dec 11, 2016] Iran's total crude oil and condensates sales likely reached around 2.8 million barrels per day in September

Dec 11, 2016 | peakoilbarrel.com
Watcher says: 12/08/2016 at 10:19 am
Iran exported condensate around the sanctions. This was called oil. Probably still do.
AlexS says: 12/08/2016 at 10:46 am
"Iran's total crude oil and condensates sales likely reached around 2.8 million barrels per day in September, two sources with knowledge of the matter said, nearly matching a 2011 peak in shipments before sanctions were imposed on the OPEC producer.

Iran sold 600,000 bpd of condensates for September, including about 100,000 bpd shipped from storage, to meet robust demand in Asia, the two sources said. September crude exports increased slightly from the previous month to about 2.2 million bpd, they said."

http://financialtribune.com/articles/energy/51005/condensates-drive-iran-oil-export-pre-sanctions-high

"Iran's condensate production has exceeded 610,000 b/d this year, with 561,000 b/d of this - or around 90% - coming from the 16 operating phases at the giant offshore South Pars gas field in the Persian Gulf, Akbary said.

The latest additions to the project were phases 17, 18 and 19, which came into operation this year, Akbary said.

In addition, eight new phases are currently being installed at the field. Phases 20 and 21 will become operational in 2017, Akbary said, while phases 13 and 22-24 are expected to begin in 2018. Iran hopes the entire development will be completed in 2021.

By then, South Pars condensate production will exceed 1 million b/d.

Smaller offshore fields under development could add another 50,000 b/d, with a further 55,000 b/d on top of this should additional projects be approved.
Onshore fields could add a further 115,000 b/d, taking total capacity to more than 1.2 million b/d.

Iran's domestic consumption currently stands at around 260,000 b/d, leaving a surplus of more than 350,000 b/d this year. But consumption is forecast to rise to more than 700,000 b/d by 2021 with the completion of new condensate splitters, such as the 360,000 b/d Persian Gulf Star.
as a result, Iran's condensate exports are expected to drop to around 250,000 b/d in 2021."
http://www.platts.com/latest-news/natural-gas/dubai/major-investment-needed-to-avoid-output-fall-26601277

[Nov 19, 2016] Is Trump a Death Sentence for the Iran Deal

Notable quotes:
"... Another tactic is to discourage international companies from doing business with Iran, an effort coordinated by the Iran Project of the Foundation for Defense of Democracies (FDD), a premier anti-JCPOA lobbying center supported by Sheldon Adelson, a prominent donor to the Republicans and Trump. For instance, the FDD took a lead in denouncing the Treasury Department's Office of Foreign Assets Control (OFAC) for easing controls on dollar transactions between Iran and foreign banks and companies. ..."
"... With so much at stake, Iranians followed the American election with great interest. The Hezb-e Etedal va Toseh (Moderation and Development Party) of President Hassan Rouhani and Ayatollah Akbar Hashemi Rafsanjani has the most to lose from the Trump presidency. ..."
"... Rouhani came to power in 2013 with a promise to fix the Iranian economy broken by years of mismanagement and sanctions. He managed to push through the JCPOA with assurances that the economic benefits would outweigh the cost of giving up the nuclear project-so much so that the Moderation and Development Party gained a majority in the 2016 parliamentary election. ..."
"... Even a cursory perusal of the Rouhani-affiliated media, such as Iran, Etemad and Arman newspapers, among others, indicates more than a passing level of anxiety about his chances in the wake of Trump's election. ..."
"... Rouhani's normalization plan, more than the JCPOA, puts the moderates on a collision course with the Revolutionary Guards and Ayatollah Ali Khamenei. The former are incensed about Rouhani's new banking regulations, while the latter opposes the type of broad opening to the world that the moderates are pushing. The supreme leader is known to worry that liberalization and Westernization would further undermine the corroding legitimacy of the theocratic state. Not surprisingly, hard-liners have reacted to Trump's victory with glee. Depicting Trump's election as "a victory of the insane over the liar," Kayhan, representing the Supreme Leader, called Trump "a shredder of the JCPOA, an agreement which had zero benefit for Iran." Javan, a mouthpiece for the Revolutionary Guards, wrote that Trump is better for Iran because he would undermine the credibility of the moderates. ..."
"... The hotly disputed ballistic-missile tests conducted by the Revolutionary Guards in the past year would also come under a review by the new administration; Congress is already crafting legislation that would further sanction implicated countries, companies and individuals. Even small infringements-like the recent incident in which the IAEA reported Iran exceeding the amount of heavy water allowed under the deal-can trigger more measures. ..."
"... Under Obama, such disputes were resolved by a special team of State Department and National Security Council officials, working with the IAEA. Whether the Trump administration would retain the team is doubtful, especially as such a move would be opposed by Bolton or other hard-liners, should they join the administration. Bolton, who accused the IAEA of covering up for Iran, would be most likely press for a more vigilant oversight of Iran's compliance, creating additional friction. This, in turn, can trigger potentially damaging developments. Under the JCPOA terms, Iran is not due additional sanction relief until 2023, but the president is required to sign periodical waivers on sanctions that are on the books if Iran is judged to be in compliance. By refusing to issue the waivers, the Trump administration would essentially abrogate American participation in the accord. ..."
Nov 16, 2016 | nationalinterest.org

Overlooked in the speculations about Trump's future decisions is the dominant role that Congress would play in shaping American policy toward the JCPOA. In 2015, in conjunction with the government of Israel and the Israel lobby in Washington, congressional Republicans mounted an unprecedented but ultimately an unsuccessful campaign to derail the deal. Still, the lobby and its congressional patrons have not abandoned their effort to limit the economic benefits of the deal to Iran. One effective tool is new sanctions-generating legislation. Lawmakers from the House Republican Israel Caucus introduced several bills which would, among others provisions, extend the Iran Sanctions Act due to expire in December 2016, block the sale of eighty Boeing planes to Iran and prohibit the Export-Import Bank from financing business with Iran. Unlike President Obama, President-elect Trump is not expected to veto the anti-Iran legislation, setting a relatively low bar for its passage.

... ... ...

Another tactic is to discourage international companies from doing business with Iran, an effort coordinated by the Iran Project of the Foundation for Defense of Democracies (FDD), a premier anti-JCPOA lobbying center supported by Sheldon Adelson, a prominent donor to the Republicans and Trump. For instance, the FDD took a lead in denouncing the Treasury Department's Office of Foreign Assets Control (OFAC) for easing controls on dollar transactions between Iran and foreign banks and companies.

After initially banning all dollar-denominated transactions, OFAC reversed itself authorizing such dealings provided they are not processed by the American financial system. In yet another effort to spur international business with Iran, OFAC declared that foreign companies could transact business with non-sanctioned Iranian companies even if a sanctioned entity held a minority share of its assets. The Treasury also relaxed the requirement that foreign companies contracting with Iranian counterparts do automatic due intelligence. Since the Revolutionary Guards have operated numerous ventures with legitimate entities, the FDD decried this step as "green-lighting" business with the Guards.

... ... ...

With so much at stake, Iranians followed the American election with great interest. The Hezb-e Etedal va Toseh (Moderation and Development Party) of President Hassan Rouhani and Ayatollah Akbar Hashemi Rafsanjani has the most to lose from the Trump presidency.

Rouhani came to power in 2013 with a promise to fix the Iranian economy broken by years of mismanagement and sanctions. He managed to push through the JCPOA with assurances that the economic benefits would outweigh the cost of giving up the nuclear project-so much so that the Moderation and Development Party gained a majority in the 2016 parliamentary election. There is little doubt that a serious reduction of the economic benefits accruing from the deal would hurt Rouhani's chances in the 2017 presidential election. Even a cursory perusal of the Rouhani-affiliated media, such as Iran, Etemad and Arman newspapers, among others, indicates more than a passing level of anxiety about his chances in the wake of Trump's election.

... ... ...

Under Obama, such disputes were resolved by a special team of State Department and National Security Council officials, working with the IAEA. Whether the Trump administration would retain the team is doubtful, especially as such a move would be opposed by Bolton or other hard-liners, should they join the administration. Bolton, who accused the IAEA of covering up for Iran, would be most likely press for a more vigilant oversight of Iran's compliance, creating additional friction. This, in turn, can trigger potentially damaging developments. Under the JCPOA terms, Iran is not due additional sanction relief until 2023, but the president is required to sign periodical waivers on sanctions that are on the books if Iran is judged to be in compliance. By refusing to issue the waivers, the Trump administration would essentially abrogate American participation in the accord.

Even without a formal abrogation, an aggressive American policy would make it hard for Rouhani to protect all the aspects of JCPOA-mandated compliance. Hard-liners may be encouraged by the fact that the EU, Russia and China are not likely to agree on snapping back sanctions, because they would hold the Trump administration responsible for disrupting flourishing trade with Tehran. It is virtually impossible to predict whether Iran, under a hard-line leadership, would resume its nuclear project. It is equally difficult to foresee whether an Obama-type coalition behind the JCPOA could be recreated in the future, should the need arise.

A Trump administration could let Tehran's hard-liners sabotage the JCPOA.
Farhad Rezaei

November 16, 2016

Rouhani's normalization plan, more than the JCPOA, puts the moderates on a collision course with the Revolutionary Guards and Ayatollah Ali Khamenei. The former are incensed about Rouhani's new banking regulations, while the latter opposes the type of broad opening to the world that the moderates are pushing. The supreme leader is known to worry that liberalization and Westernization would further undermine the corroding legitimacy of the theocratic state. Not surprisingly, hard-liners have reacted to Trump's victory with glee. Depicting Trump's election as "a victory of the insane over the liar," Kayhan, representing the Supreme Leader, called Trump "a shredder of the JCPOA, an agreement which had zero benefit for Iran." Javan, a mouthpiece for the Revolutionary Guards, wrote that Trump is better for Iran because he would undermine the credibility of the moderates.

... ... ...

The hotly disputed ballistic-missile tests conducted by the Revolutionary Guards in the past year would also come under a review by the new administration; Congress is already crafting legislation that would further sanction implicated countries, companies and individuals. Even small infringements-like the recent incident in which the IAEA reported Iran exceeding the amount of heavy water allowed under the deal-can trigger more measures.

Under Obama, such disputes were resolved by a special team of State Department and National Security Council officials, working with the IAEA. Whether the Trump administration would retain the team is doubtful, especially as such a move would be opposed by Bolton or other hard-liners, should they join the administration. Bolton, who accused the IAEA of covering up for Iran, would be most likely press for a more vigilant oversight of Iran's compliance, creating additional friction. This, in turn, can trigger potentially damaging developments. Under the JCPOA terms, Iran is not due additional sanction relief until 2023, but the president is required to sign periodical waivers on sanctions that are on the books if Iran is judged to be in compliance. By refusing to issue the waivers, the Trump administration would essentially abrogate American participation in the accord.

Even without a formal abrogation, an aggressive American policy would make it hard for Rouhani to protect all the aspects of JCPOA-mandated compliance. Hard-liners may be encouraged by the fact that the EU, Russia and China are not likely to agree on snapping back sanctions, because they would hold the Trump administration responsible for disrupting flourishing trade with Tehran. It is virtually impossible to predict whether Iran, under a hard-line leadership, would resume its nuclear project. It is equally difficult to foresee whether an Obama-type coalition behind the JCPOA could be recreated in the future, should the need arise.

Dr. Farhad Rezaei is a research fellow at Middle East Institute, Sakarya University, Turkey. He is the author of the forthcoming Iran's Nuclear Program: A Study in Nuclear Proliferation and Rollback (New York: Palgrave Macmillan, 2016).

[Nov 16, 2016] Iran acts as a spoiler of OPEC effects to limit oil production

Nov 16, 2016 | peakoilbarrel.com
AlexS 11/15/2016 at 4:59 pm
Iran opens three new oilfields as it boosts output

Nov 13, 2016
http://www.reuters.com/article/us-iran-oil-idUSKBN1380FJ

Iran opened three oilfields with a total production of more than 220,000 barrels per day (bpd) on Sunday, as the country ramps up its production after the lifting of sanctions.
President Hassan Rouhani officially launched the first phases of the Yadavaran and North Azadegan fields as well as the North Yaran field, which are shared with neighboring Iraq, the Iranian oil ministry's news agency SHANA reported.
Yadavaran will have a production of up to 115,000 bpd in its first phase and North Azadegan's output is 75,000 bpd, SHANA said.
North Yaran will initially produce 30,000 bpd, the news agency reported last week.

[Aug 25, 2016] Iran production will increase, but domestic consumption will also increase rapidly

Notable quotes:
"... My personal prejudice is that with the removal of sanctions that much of Iran's production increase eventually will be gobbled up by domestic use – their population seems to be too large for it to be otherwise. ..."
Aug 25, 2016 | peakoilbarrel.com
clueless , 08/22/2016 at 2:28 pm
Nick , "KSA, for instance, is already using more per capita than almost anyone."

Is that really true? Does that include all the amounts that run through its refineries and chemical plants for export? I casually observe that Iran, with many more people, uses much less. Iran has no substantial refineries, etc. But, they appear to have much more military/industrial capability.

Maybe someone here knows of a reference that discusses the uses of oil by KSA viz-a-viz the uses by Iran. My personal prejudice is that with the removal of sanctions that much of Iran's production increase eventually will be gobbled up by domestic use – their population seems to be too large for it to be otherwise.

Nick G , 08/23/2016 at 10:42 am
Does that include all the amounts that run through its refineries and chemical plants for export?

It just includes domestic consumption. Iran prices gasoline somewhere near it's market price, while KSA greatly underprices it for domestic consumers. Iran uses a lot of CNG for personal transportation, I believe.

KSA uses oil for electrical generation, which is ridiculous – it's far more expensive. But, that's the political power of legacy industries…

[Aug 12, 2016] It sounds like Iran might have started to sell some of its condensates stockpile

peakoilbarrel.com
Chart Monkey , 08/09/2016 at 3:48 am
Iran oil news…

Iran July crude output 3.63 mill b/d, flat from June, according to PlattsOil OPEC survey. 1st time this year no month-on-month increase
Last month: Iran oil output 3.66 mln bpd in June, up 50,000 bpd on May and up 750,000 bpd since sanctions were lifted.
Iran says, oil exports over 2.5 million bpd, near pre sanctions level
Iran: VP Jahangiri on Sunday: IPCs soon to be signed. $220 billion worth of projects are ready for investment in the oil sector.

George Kaplan , 08/09/2016 at 4:28 am
Iran are just finalising the petroleum contract details and will start engaging foreign companies for JVs, although the coming Presidential elections might mean they have to start all over again. I can't see there is that much difference now to what was happening before the sanctions, but the important point will be how much per barrel the outside companies can negotiate.

The oil is mostly in mature, carbonate reservoirs; often originally developed without pressure support but now with gas and some water injection. I think they are only getting around 20 to 25% recovery. They are looking for more of the same to support increased production but also EOR (e.g. maybe miscible gas?) to increase recovery. Gas injection is not cheap – the gas has to be bought (might be 10 to 15% of the oil price if natural gas is used – even if you get it back during end of life blow down it doesn't help current NPV much), and the compressors, treatment plants and pipelines needed are capitally and operationally intensive, and take some time to design and install. So Iran will be asking the foreign majors to take on even more debt and risk to increase production some years in the future, based on probably flat rate per barrel payments. It will be interesting to see how the negotiations turn out (e.g. what price per barrel the companies are looking for, their appetite to take all the debt burden and how much they get to know about the reservoirs), especially as the similar Iraq efforts may be looking a bit disappointing to some at the moment.

Chart Monkey , 08/10/2016 at 8:08 am
It sounds like Iran might have started to sell some of its condensates stockpile…

ThomsonReutersEnergy – Iran oil exports mixture shifts as condensates represent more than 20%, from 8% in Jan.

George Kaplan , 08/10/2016 at 12:34 pm
With South Pars still ramping up they should be around 18 to 20% condensate in their overall production mix, so maybe they took condensate out of the export's while their were sanctions. Alternatively they have a strong petrochemical industry and use LPG for domestic car fuel as well so maybe the export mix is different.
AlexS , 08/11/2016 at 10:37 am
Iran's refinery expansion program includes construction of five new refineries and expansion of existing plants.
At least three of the new processing plants should accommodate the country's rising condensate supplies:

• Already under construction in Bandar Abbas, the Persian Gulf Star Refinery, due for startup in 2017, will have capacity to process 360,000 b/d of condensate from South Pars field

• Also under construction is 480,000-b/d gas condensate refinery in Siraf, which should process stabilized gas condensate feedstock from different phases of South Pars.

• 120,000-b/d Pars condensate refinery in Shiraz, scheduled for startup in 2025.

[Apr 25, 2016] The Iranians are now saying that their oil production will reach 4 million bbl per day by June of this year

Notable quotes:
"... Lifting of the sanctions has given a major lift to Iran's economy. Last week the IMF reported that it expects Tehran's economy to grow by 4 percent this year. Iran is making an effort to collect the oil revenues from those countries that continued to take Iranian oil during the sanctions but were unable to transfer money to Tehran. Some 6.5 billion euros are said to be owing. ..."
Peak Oil Review - Apr 25

Iran: The Iranians are now saying that their oil production will reach pre-sanctions levels of 4 million b/d by June of this year, up from the 3.5 million b/d they claim to have produced in March. The addition of another 500,000 b/dwithin two months is certainly faster than anybody anticipated, but some analysts are now saying it is possible. India's Reliance Industries recently announced a long-term oil deal with Tehran.

Among the problems Iran would have in increasing production by 500,000 b/d in the next few months is the lack of ships to move the oil to customers, if they can find them. Many of the worlds' tankers are tied up in massive queues at import and export terminals that are at loading and unloading capacity. Lingering issues about US sanctions have left some tanker owners reluctant to get involved with Tehran for fear they could be banned from doing business with the US. Much of Iran's tanker fleet no longer meets safety standards and must be overhauled before visiting foreign ports.

Lifting of the sanctions has given a major lift to Iran's economy. Last week the IMF reported that it expects Tehran's economy to grow by 4 percent this year. Iran is making an effort to collect the oil revenues from those countries that continued to take Iranian oil during the sanctions but were unable to transfer money to Tehran. Some 6.5 billion euros are said to be owing.

Tehran's final problem in increasing its oil export is to find foreign investors willing to put money into its aging oil industry. While it may be possible to increase oil production by the 500,000 b/d that Tehran is aiming for, further production increases will require massive amounts of investment that will have to be raised from foreign sources. Arguments in Tehran about how much foreigners should be allowed to profit from exploiting Iranian oil continue. Iran's latest revisions to proposed contracts for foreign oil companies are so unfavorable that some doubt there will be many offers.

[Mar 22, 2016] Grave reservations about the alleged spare capacity of Iran

Notable quotes:
"... I have grave reservations about the alleged spare capacity of Iran. The assumption is that the big, bad sanctions resulted in a huge drop in Iran's oil production. I am not buying it. I think the sanctions were a joke. For starters many nations refused to take part in the sanctions. Nations like India, china, japan and South Korea for starters. It would not be difficult to then reexport this oil to the rest of the world on the sly. Would you please comment on this important matter. Does anyone have any inside information about this? nuassembly 20 Mar 2016, 11:25 AM Comments (13) | + Follow | Send Message Agree, most of us follow news as herd effect, but devil is in the detail. Before the sanction, Iran was export 2.5 million barrels of oil per day but had to import almost 0.5million barrels of processed fuel, gasoline and diesel. ..."
"... Now, 4 years after the sanction starts, Iran already built up the refinery capacity, so it will no longer need import of refined fuels; instead it will be exporting, how much is yet to be decided. So, right there, we will see over 0.5 million barrels of reduction in the oil to be exported from Iran. Yes, the sanction reduced the Iranian oil export from 2.5million to 1.5million per day, but the net effect after sanction now will be less than 0.5 million per day to the world market. ..."
seekingalpha.com
Forty Years a Speculator 21 Mar 2016, 07:06 PM Comments (50) |+ Follow |Send Message
I have grave reservations about the alleged spare capacity of Iran. The assumption is that the big, bad sanctions resulted in a huge drop in Iran's oil production. I am not buying it. I think the sanctions were a joke. For starters many nations refused to take part in the sanctions. Nations like India, china, japan and South Korea for starters. It would not be difficult to then reexport this oil to the rest of the world on the sly.

Would you please comment on this important matter. Does anyone have any inside information about this?

nuassembly 20 Mar 2016, 11:25 AM Comments (13) |+ Follow |Send Message
Agree, most of us follow news as herd effect, but devil is in the detail.

Before the sanction, Iran was export 2.5 million barrels of oil per day but had to import almost 0.5million barrels of processed fuel, gasoline and diesel.

Now, 4 years after the sanction starts, Iran already built up the refinery capacity, so it will no longer need import of refined fuels; instead it will be exporting, how much is yet to be decided. So, right there, we will see over 0.5 million barrels of reduction in the oil to be exported from Iran. Yes, the sanction reduced the Iranian oil export from 2.5million to 1.5million per day, but the net effect after sanction now will be less than 0.5 million per day to the world market.
Michael Filloon, 20 Mar 2016, 01:47 PM Comments (4564) |+ Follow |Send Message
40 years, I would be surprised if you didn't have reservations. You aren't the only one. Iran's infrastructure wasn't that great before the sanctions so I would guess they are abysmal now.

I don't think they can get to 4 million this year, but the problem with that is I am speculating so we will just have to track its exports and see what happens. Right now, I think it would be ok to reduce that number by 400K BO/d.

I think the biggest issue is Iran thinks its possible, so maybe there is something going on we haven't thought about. Probably not, but it is still something to consider. I wasn't a big fan of the sanctions either, but some politicians would say they worked. I think it is very possible to re-export the oil the only problem is the very large volumes Iran can produce. If this was a small producer it is probably easy if you sell it cheap enough (like ISIS does).

<

[Mar 16, 2016] Iran faces hurdles hiking oil production when sanctions lifted

Notable quotes:
"... Iran's condensate production is increasing along with production of natural gas. Gains followed completion a few months ago of several development phases at giant offshore South Pars field, including phases 12, 15-16, and 17-18, which added 120,000 b/d of condensate ready for export. Most of the condensate is being stored at sea, occupying two thirds of Iran's current floating capacity and awaiting a buyer. Iran's condensate production is expected rise even further in 2016. ..."
"... It is thus conceivable that Iran can raise its crude oil production about 500,000-700,000 b/d within 3 months, and up to 800,000 b/d within 6 months. ..."
"... Most of Iran's competitors supplying similar crude oil to the same markets, mainly Saudi Arabia and Kuwait, have secured their sales by signing term agreement with customers. These commitments are usually for at least 1 year. ..."
"... Since Iran lacks a huge capacity to store unsold oil, it could increase crude oil production only slowly and cautiously. ..."
"... The outlook for Iranian condensate is different. High in sulfur, Iran's condensate is considered a light crude and is traded at prices higher than those of its heavy oil. Iran has fewer competitors for condensate-for which demand, particularly in Asia, is high-than for oil. ..."
"... Condensate flow will increase with gas production, particularly from South Pars field, an extension of Qatar's supergiant North field. The field has been Zangeneh's highest priority for development. ..."
www.ogj.com

Oil & Gas Journal

Iran's mature oil fields are in advanced stages of decline. The US Energy Information Administration estimates that Iranian oil fields have natural decline rates of 8-11% and recovery rates of 20-25%.

Iran had planned to employ water and gas injection for enhanced oil recovery. Gas injection in mature field was to have reached 330 million cu m/day by the end of 2016. Since 2011, however, Iran hasn't been able to reach more than 60% of its gas-injection goals. The average of actual gas injected between March 2006 and March 2011 never increased more than 75% of what was originally planned.

... ... ...

After the European Union-imposed embargos on exports and shipping insurance in 2012, Iranian oil exports fell to almost half their level of a year earlier, forcing National Iranian Oil Co. (NIOC) to cut production and shut down some of its fields. The cuts of course focused on very mature, inefficient fields and wells, especially those producing heavy and extra-heavy crude oil.

In all, Iran's production and production capacity have been hammered. Since Iran cannot produce crude oil at maximum potential rates, and because it has had to halt production from some of its older fields, analysts cannot precisely estimate Iran's production capacity. Estimating potential recovery from idle fields would be guesswork.

The Iranian oil ministry estimates the country's crude oil production capacity at 3.5-3.7 million b/d. With condensate considered to be light crude oil, production capacity rises to perhaps 4 million b/d.

Production rebound

Aside from real uncertainties about oil production capacity, Iran's ability to increase production in case of sanctions relief is another major question. If sanctions are lifted, how much and for how long will it take Iran to increase its production?

Oil Minister Bijan Zangeneh announced that Iran's production could increase by up to 1 million b/d quickly. The International Energy Agency estimates that Iran's production capacity is 3.6 million b/d and that the country can increase output by 600,000-800,000 b/d within 3 months. In May, the IEA reported Iranian production in April of 2.88 million b/d, up 90,000 b/d from March.

Two main uncertainties hamper predictions about Iran's oil production rebound. The first is Iran's technical ability to raise output. The second is the country's ability to export oil.

Some observers argue that production cuts in old fields have enabled reservoir pressures to increase and might allow production to resume at high rates. Gas injection also might boost output in mature fields within 3-6 months.

Iran's condensate production is increasing along with production of natural gas. Gains followed completion a few months ago of several development phases at giant offshore South Pars field, including phases 12, 15-16, and 17-18, which added 120,000 b/d of condensate ready for export. Most of the condensate is being stored at sea, occupying two thirds of Iran's current floating capacity and awaiting a buyer. Iran's condensate production is expected rise even further in 2016.

It is thus conceivable that Iran can raise its crude oil production about 500,000-700,000 b/d within 3 months, and up to 800,000 b/d within 6 months.

But the other question, access to the market, remains unanswered. The sanctions target Iranian exports. It might take at least 3-6 months from the time of a nuclear agreement for sanctions to be lifted significantly. And removal of the ban on imports of Iranian oil in Europe requires a consensus of EU members. This might be hard to achieve quickly.

There is no doubt that any nuclear deal will have an immediate psychological effect on the market. Sales negotiations will start, and Iran at least could slightly increase its crude oil and condensate exports, particularly by the last quarter of this year when a seasonal demand increase in Iran would absorb some of the incremental production.

Regaining market share

Beyond sanctions, Iran's other challenge for raising its oil exports is regaining lost market share. This problem is particularly acute at a time of oversupply and low oil prices.

Most of Iran's competitors supplying similar crude oil to the same markets, mainly Saudi Arabia and Kuwait, have secured their sales by signing term agreement with customers. These commitments are usually for at least 1 year.

So Tehran has no choice other than to sell most of its oil in the spot market for the next year. It will have to create incentives for signing term contracts to regain long-term market share. Since Iran lacks a huge capacity to store unsold oil, it could increase crude oil production only slowly and cautiously. With prices low, it doesn't make sense for Iran to rent tankers as floating storage and sell oil at further discounts. Oil stored at sea will encourage Iran's customers to push for further discounts.

The outlook for Iranian condensate is different. High in sulfur, Iran's condensate is considered a light crude and is traded at prices higher than those of its heavy oil. Iran has fewer competitors for condensate-for which demand, particularly in Asia, is high-than for oil.

Condensate flow will increase with gas production, particularly from South Pars field, an extension of Qatar's supergiant North field. The field has been Zangeneh's highest priority for development.

Condensate makes up much of the 30 million bbl of oil Iran currently holds in floating storage, which will provide the first cargos ready for immediate export when sanctions are lifted. This offloading would reduce rental costs while Iran prepared to boost production. Therefore, we can expect an immediate release of oil from floating storage upon any possible deal at the end of June or in early July.

If negotiations lead to a comprehensive deal on Iran's nuclear program by the end of June or early July, Iranian production and exports will rise about 200,000 b/d by the end of 2015 because at least some of the sanctions might then have been eased and because global demand will be seasonally high. The rest of the country's production and export increase would enter the market gradually through mid-2016.

An open question is how extra Iranian supply would affect the global oil market. While predictions vary for production from shales and other low-permeability formations in 2016, most analysts expect low oil prices at least to suppress growth rates from these sources if not to cause declines in the next year or two. Decline forecasts have been as high as 1 million b/d of so-called tight oil.

A gradual rise of crude and condensate from Iran thus might be offset by a decline from shale next year and have a modest impact on the price of oil. That balance, of course, has a broader geopolitical context as crises in Yemen and Iraq keep upward pressure on the crude price.

The author
Sara Vakhshouri is founder and president of SVB Energy International, a strategic energy consulting firm based in Washington, DC. She advises international corporations, think tanks, investment banks, and law firms on global energy markets, geopolitics of energy, and investment patterns. During 2000-08, she worked in the public and private sectors of the Iranian energy industry. From 2004 to 2005, she worked as an advisor to National Iranian Oil Co. International, a division responsible for marketing and sale of Iranian crude oil and products. Vakhshouri holds a PhD in energy security and Middle Eastern studies and was a visiting fellow at Oxford Institute for Energy Studies. She has MA degrees in business management (international marketing) and international relations.

[Mar 16, 2016] Iran's Return To The Oil Markets Less Damaging Than Expected

OilPrice.com
For last month, OPEC's crude oil production dropped 90,000 barrels per day, on some small losses in Iraq, Nigeria and the United Arab Emirates, but new production from Iran and the maintenance of the production status quo in Saudi Arabia has kept losses to an overall minimum. Production from Iraqi, Nigeria and UAE combined fell by 350,000 barrels per day in February.

We could also expect continued declines of exports coming from Iraq in March

[Mar 10, 2016] Iran ordered to pay $10.5 billion for 9-11 by US judge

Notable quotes:
"... A US judge ordered Iran to pay over $10 billion in damages to families of victims who died on September 11, 2001 – even though there is no evidence of Tehran's direct connection to the attack. The same judge earlier cleared Saudi Arabia from culpability. ..."
"... The default judgement was issued by US District Judge George Daniels in New York on Wednesday. Under the ruling, Tehran was ordered to pay $7.5 billion to 9/11 victims' families, including $2 million to each victim's estate for pain and suffering, and another $6.88 million in punitive damages. Insurers who paid for property damage and claimed their businesses were interrupted were awarded an additional $3 billion in the ruling. ..."
"... Saudi Arabia was legally cleared from paying billions in damages to families of 9/11 victims last year, after Judge Daniels dismissed claims that the country provided material support to the terrorists and ruled that Riyadh had sovereign immunity. Saudi attorneys argued in court that there was no evidence directly linking the country to 9/11. ..."
"... "absurd and ridiculous." ..."
"... "I never heard about this ruling and I'm very much surprised because the judge had no reason whatsoever to issue such a ruling… Iran never took part in any court hearings related to the events of September 11, 2001," ..."
"... "Even if such an absurd and ridiculous decision has been made, the charges simply hold no water because Iran has never been mentioned at any stage of the investigation and the trials that followed." ..."
"... While Sheikholeslam argued that Iran didn't take part in related hearings, that lack of participation may have contributed to the decision. A default judgment is typically issued when one of the parties involved in a case does not respond to court summons or appear in court to make their case. ..."
"... "advice and training" ..."
"... "provided material support" ..."
"... "direct support" ..."
"... "There was no direct connection between Iran and the attacks of September 11." ..."
"... "The people who committed those terrorist attacks were neither friends nor allies of Iran," ..."
"... "They were our sworn enemies, members of Al-Qaeda, which considers Iran as their enemy. Fifteen out of the 19 terrorists were Saudi citizens, which happens to be America's best friend. The remaining four terrorists lived in Saudi Arabia and enjoyed Saudi support. Therefore the perpetrators of the 9/11 attacks had nothing to do with Iran." ..."
Mar 10, 2016 | RT USA
© Eduardo Munoz / Reuters

A US judge ordered Iran to pay over $10 billion in damages to families of victims who died on September 11, 2001 – even though there is no evidence of Tehran's direct connection to the attack. The same judge earlier cleared Saudi Arabia from culpability.

The default judgement was issued by US District Judge George Daniels in New York on Wednesday. Under the ruling, Tehran was ordered to pay $7.5 billion to 9/11 victims' families, including $2 million to each victim's estate for pain and suffering, and another $6.88 million in punitive damages. Insurers who paid for property damage and claimed their businesses were interrupted were awarded an additional $3 billion in the ruling.

The ruling is noteworthy particularly since none of the 19 hijackers on September 11 were Iranian citizens. Fifteen were citizens of Saudi Arabia, while two were from the United Arab Emirates, and one each from Egypt and Lebanon.

Saudi Arabia was legally cleared from paying billions in damages to families of 9/11 victims last year, after Judge Daniels dismissed claims that the country provided material support to the terrorists and ruled that Riyadh had sovereign immunity. Saudi attorneys argued in court that there was no evidence directly linking the country to 9/11.

In response to the latest ruling, Hossein Sheikholeslam, a senior aide to Iran's parliamentary speaker, called the decision "absurd and ridiculous."

"I never heard about this ruling and I'm very much surprised because the judge had no reason whatsoever to issue such a ruling… Iran never took part in any court hearings related to the events of September 11, 2001," he told Sputnik. "Even if such an absurd and ridiculous decision has been made, the charges simply hold no water because Iran has never been mentioned at any stage of the investigation and the trials that followed."

While Sheikholeslam argued that Iran didn't take part in related hearings, that lack of participation may have contributed to the decision. A default judgment is typically issued when one of the parties involved in a case does not respond to court summons or appear in court to make their case.

Judge Daniels found that Iran failed to defend itself against claims that it played a role in 9/11. Iran believes the lawsuit is unnecessary because it says it did not participate in the attack.

In the US, Tehran's role in 9/11 has been debated heavily over the years. The 9/11 Commission Report stated that some hijackers moved through Iran and did not have their passports stamped. It also stated that Hezbollah, which the US designates as a terrorist organization supported by Iran, provided "advice and training" to Al-Qaeda members.

In a court document filed in 2011 regarding the latest case, plaintiffs claimed Hezbollah "provided material support" to Al-Qaeda, such as facilitating travel, plus "direct support" for the 9/11 attacks. As a result, the plaintiffs argued Iran was liable.

However, the commission report itself found no evidence to suggest Iran was aware of the 9/11 plot, and suggested the possibility that if Hezbollah was tracking the movements of Al-Qaeda members, it may not have been eyeing those who became hijackers on 9/11.

While the report suggested further investigation into the issue, President George W. Bush has said, "There was no direct connection between Iran and the attacks of September 11."

Iran, inhabited mostly by Shia Muslims, has also denied any connection to Al-Qaeda – a militant Sunni group – and cooperation between the two has been questioned due to religious differences. Al-Qaeda views the Shia as heretics, for example.

"The people who committed those terrorist attacks were neither friends nor allies of Iran," Iran Press Editor-in-Chief Emad Abshenas told Sputnik. "They were our sworn enemies, members of Al-Qaeda, which considers Iran as their enemy. Fifteen out of the 19 terrorists were Saudi citizens, which happens to be America's best friend. The remaining four terrorists lived in Saudi Arabia and enjoyed Saudi support. Therefore the perpetrators of the 9/11 attacks had nothing to do with Iran."

How the case moves forward after Daniels' ruling is unclear. According to Bloomberg, it can be very hard to obtain damages from another country, but plaintiffs might try to do so by targeting Iranian funds frozen by the US.

[Mar 09, 2016] Iran Slowly But Steadily Increasing Oil Market Share OilPrice.com

oilprice.com
By Rakesh Upadhyay 09 March 2016 21:1

Iran is expected to raise the April Official Selling Price (OSP) of its flagship light crude oil to Asia to 25 cents above the Saudi's similarly graded Arab light. This is the highest premium since 2011 and is an increase of 30 cents over the previous month.

Iran will likely price its light crude at 50 cents a barrel below the average of Oman and Dubai quotes, whereas the OSP for Iran Heavy will likely be $2.60 a barrel below Oman and Dubai quotes.

But not all crudes are equal, and when it comes to Iran Heavy Grade , pricing will remain aggressively competitive. Heavy Grade is Iran's main export grade, which must compete with Latin America, Iraq and Saudi Arabia-all of whom supply a similar grade.

Related: Six Reasons The Current Oil Short Covering May Have Legs

When it comes to its light crude, though, the competitive price Iran has offered so far was for internal reasons and intended to reduce gasoline imports.

Many experts believed that Iran would offer large discounts to regain the market share it lost under the sanctions regime. However, Iran is using a calculative approach towards increasing its share and is looking to consolidate and increase exports to its existing partners such as China, South Korea, and India, in Asia.

Iran expects to increase exports to India to 460,000 bpd from the current 260,000 bpd. Similarly, it expects to further increase its exports to South Korea , which has already imported 203,165 bpd-its highest level since 2012.

Related: Oil Rally Stalls As Storage Concerns Spike

Demand from Europe has been a little slow to pick up due to ship insurance and banking-related issues. Nevertheless, the first shipment to Europe landed in Southern Spain on 6 March 2016. Three more tankers--one bound for Romania , another to France and a third to the Mediterranean--are expected to reach their destinations soon.

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BIMCO's chief shipping analyst, Peter Sand, said, "Former clients of Iran are the ones who are likely to return as buyers... Italy, Spain and Greece were the top EU importers in 2011."

The mid-March meeting between OPEC, Russia and other major producers offers a window of opportunity for Iran to increase production gradually, since the major nations have agreed to a production freeze. On top of that, Russia is planning to offer a different deal to Iran, which will allow it to ramp up its production to pre-sanction levels.

Related: The $9.2 Billion Bet Against OPEC Dominance

The lifting of sanctions couldn't have come at a better time for Iran. It is benefitting from the strong bounce in oil, and it is unlikely to face huge competition, barring U.S. exports, if the production freeze is adhered to by the major oil producers.

Tehran has cause for celebration, indeed. This was clear when Iranian Oil Minister Bijan Zanganeh said : "We look forward to the beginning of co-operation between Opec and non-Opec countries and we support any measure that can stabilise the market and increase prices."

The world can take comfort from the fact that Iran has not flooded the market with cheap oil as previously envisaged by the experts. Capturing market share is one thing, but there are internal needs to consider as well.

By Rakesh Upadhyay for Oilprice.com

More Top Reads From Oilprice.com:

[Feb 23, 2016] Iran Calls Proposed Saudi-Russian Oil-Output Freeze `Ridiculous'

Probably disinformation...
Bloomberg Business

Iran called a proposal by Saudi Arabia and Russia to freeze oil production "ridiculous" as its seeks to boost its own output after years of sanctions constrained sales.

The proposal by Saudi Arabia, Russia, Venezuela and Qatar for oil producers to cap output at January levels puts "unrealistic demands" on Iran, Oil Minister Bijan Namdar Zanganeh said Tuesday, according to the ministry's news agency Shana.

"It is very ridiculous, they come up with the proposal on freezing oil production and call for this freeze to take place in their 10 million barrels a day production vis-a-vis Iran's 1 million barrels a day" planned production boost, he said. "If Iran's crude oil production falls, it will be overtaken considerably by the neighboring countries."

The three OPEC members and Russia are seeking to stop the 40 percent drop in oil prices over the past year caused by a global crude glut. Iran is seeking to boost output by 1 million barrels a day this year after international sanctions on its oil industry were lifted last month.

[Feb 21, 2016] French bank BNP Paribas last week confirmed it would halt funding oil and gas companies with large capital requirements

peakoilbarrel.com
George Kaplan, 02/21/2016 at 3:50 pm
Oil firm bankruptcy in North Sea: http://www.oilandgaspeople.com/news/7398/suttie-pulls-plug-on-first-oil/

This is quite interesting from the article: "French bank BNP Paribas last week confirmed it would halt funding oil and gas companies with large capital requirements, particularly in the US."

[Feb 21, 2016] As one banker put it, we are looking to save ourselves now

Notable quotes:
"... It is estimated that ~250,000 people have lost their jobs in the industry in the last 18 months. ..."
"... Ive mentioned this a few times...but in the 80s you SAW the economic crush all around you. For those who do not live in our visit Houston, Im telling you....something is very bizarre here that puzzles the shit out of me.....malls are packed, and you dont see crush anywhere...I dont get it. ..."
www.zerohedge.com
One week ago, when we commented on the latest weekly update from Credit Suisse's very well hooked-in energy analyst James Wicklund, one particular phrase stuck out when looking at the upcoming contraction of Oil and Gas liquidity: "while your borrowing base might be upheld, there will be minimum liquidity requirements before capital can be accessed. It is hitting the OFS sector as well. As one banker put it, "we are looking to save ourselves now."

In his latest note, Wicklund takes the gloom level up a notch and shows that for all the bank posturing and attempts to preserve calm among the market, what is really happening below the surface can be summarized with one word: panic, and not just for the banks who are stuck holding on to energy exposure, or the energy companies who are facing bankruptcy if oil doesn't rebound, but also for their (now former) employees. Curious why average hourly earnings refuse to go up except for those getting minimum wage boosts? Because according to CS "It is estimated that ~250,000 people have lost their jobs in the industry in the last 18 months."

... ... ...

Wicklund concludes with some even more troubling observations about the recent OPEC headline-induced volatility and the future price of oil:

Rolling On. What was originally a "surplus-induced" downturn is now turning into a global credit downturn, with economic demand and GDP continuing to decline. US corporate debt levels are close to all-time highs as a share of GDP and global monetary policy has very few levers left to pull. "Duration" has become the new buzzword, "survivability" appears to be the key investment metric and any lights in the tunnel appear to be dimming.

The Fix. Demand was going to be the bailout and specifically consumer led demand, however, just about every economic report issued seems to deny that possibility. It is easy to say that with demand growing and capital starved supply waning, reaching balance and beginning growth is inevitable. But it may not be as simple as that and the timing remains one key question. And that key question is one that everyone has an opinion on. Now, it appears that Saudi, Russia, Iraq and Iran MIGHT come to some agreement to cap production growth at January levels, which was up more than 280kbopd from December. The cap offers some positive, but it makes any production CUTS less likely .

All this, as global demand across every industry continues to contract and as central banks are now powerless to do virtually anything, means that the true lows in the oil price are still ahead of us.

Latitude25

Let me guess. The banks are selling securitized energy loans to the muppet pension funds for pennys on the dollar and soon to be totally worthless.

Central Bankster

If you try to inflate assets, it will cause massive distortions in price (IE reinflating oil from$30 in 2009 to $110 a few years later) created a massive and misguided allocation of capital into new oil production...

Antifaschistische

I've mentioned this a few times...but in the 80's you SAW the economic crush all around you. For those who do not live in our visit Houston, I'm telling you....something is very bizarre here that puzzles the shit out of me.....malls are packed, and you don't see crush anywhere...I don't get it.

...and I have NOTHING to gain from a crush, because I'll eventually get swept out to sea also...but it's just crazy here with construction at a non-stop pace. Everyday of my life is like economic doomsday prepping in Houston.

Beatscape

Coming to a ticker tape near you: The 10(!) times upside Oil ETF, filled with all these toxic energy loans and oil companies teetering into bankruptcy. A fool and his money are soon parted.

VWAndy

Bingo they are searching for bagholders now. Too bad there are no bagholders with pockets that deep.


Racer

As one banker put it, "we are looking to save ourselves now."

Total rubbish, the banks NEVER look to save themselves

buzzsaw99

There are reports of banks selling loans at cents on the dollar to try and ensure their own survival...

smells like bullshit. which banks? which loans? how many cents on the dollar? how does booking a major loss ever help a bank?

Bank_sters

Strangely, most articles I read are about how little exposure all the big banks have. So who is holding the 2 trillion dollars of energy related debt that has been created over the last 12 years?

abyssinian

All the banks are fine, Deutsche Bank's CEO said they are solid as a rock and buying their bonds back, JP Morgan CEO just bought tons of company stocks with his bonus and Tim Seymore Butt from CNBC said there is no recession, everything is great and people just making noises. Everything is good!

ConanTheLibert... -> abyssinian

"Deutsche Bank's CEO said they are solid as a rock"

Like the corpse has turned solid as a rock?

Catullus

Talked to a consultant in CRE in Texas on Friday. Said he's never seen it like this in 30 years in Houston. Dallas is ok for now. Credit is terrible. Everyone asking for LOCs or AAs even for power contracts to the buildings.

Don't let a bank tell you this is energy only exposure. It extends to CRE as well

Christophe2

LOCs = lines of credit :)

White Mountains

Old Man of the See - this is because if you open a successful profitable store, tattoo shop, or whatever, the copycats see your success and so open an identical business right across the street hoping to take your success.

Then, you get to compete on price which means both businesses circle close to the toilet bowl as you fight tooth and nail for market share and ever dwindling profits because there is always some dumbass willing to work himself to death for slave wage returns or even loose money as he knocks viable businesses out of business.

Amazon's business model is a non-profit loser much like this only on a huge and very destructive scale.

Fuku Ben

And if the banks go under who loses? One more reason to believe the Fed is lying when it denied they allegedly instructed banks to not force bankruptcies on these companies. Prevent the bankruptcy and find a way to dump the fallout on someone else to CYA and let someone lower on the food chain take the hit. Isn't that how the hierarchical criminal ponzi scheme works?

Who do you think the Fed cares more about after themselves, if anyone?

A. Banks
B. Shareholders
C. 3rd Party Corporations that do business with either banks or the Fed
D. Employees of any Corporations
E. Some poor workers pension fund purchasing the new fraud scheme that will be cooked up to hand these failures off to the muppets
F. None of the above. Central Banks are so megalomaniacal they only care about themselves, their profits and interests above all else.

http://www.zerohedge.com/news/2016-01-16/exclusive-dallas-fed-quietly-su...

Jack Burton

"It is estimated that ~250,000 people have lost their jobs in the industry in the last 18 months."

and found new jobs as waiters and bartenders. Got government jobs, city, county, state, federal, joined the army, went to school to become nurses.

America is still the opportunity society!

[Feb 20, 2016] US energy sector sucking wind and oil equilibrium might be closer than we think

Notable quotes:
"... Following on from a sharp downward revision in its benchmark crude and natural gas price assumptions in January, S&P also lowered the ratings on 25 speculative-grade companies after reviewing 45. ..."
"... S&P on January 12 slashed its Brent and WTI crude price assumptions to $40/barrel each (from $55 and $50 respectively) and Henry Hub natural gas price assumption to $2.50/MMBtu (from $3). ..."
"... S&P flagged the "liquidity risks" faced by the smaller E&P companies, "particularly with respect to the April 2016 revolving credit facility bank borrowing base redeterminations." ..."
"... S&P expects the companies' borrowing bases will have shrunk by 20-30% at the next re-determination in April, as the cutback in drilling activity in 2015 has hobbled their reserves replacement. ..."
"... The US Energy Information Administration in its short-term market outlook released Feb 9 said it expects US production to fall to an average 8.69 million b/d this year from an average of 9.43 million b/d in 2015. And slip further to 8.46 million b/d in 2017. ..."
Feb 15, 2016 | The Barrel Blog
US E&P sector sucking wind: Is oil's equilibrium closer than we think?

How long does the world have to wait before all the surplus oil sloshing around gets mopped up and prices find an equilibrium point that represents balanced supply and demand? Would you believe it if someone said that might be just a quarter and a bit away?

On the supply side, all bets are on shale to bail: there is no hope of output cuts from OPEC, let alone a coordinated action with other major producers such as Russia, amid a stubborn quest for market share.

If anything, most OPEC members are pumping full tilt and some such as Kuwait and Iraq are eying a production boost this year. A sanctions-free Iran is preparing to offload an additional 0.5-1.0 million b/d on an already oversupplied market, though the pace of that return is highly uncertain.

The question then arises, how long before more US producers buckle under and how sharp might the drop in output be?

Standard & Poors Ratings earlier this month downgraded big names in shale including Chevron, Apache, EOG Resources, Devon, Hess, Marathon and Murphy. Of the 20 "investment-grade" companies the agency reviewed, three were placed on Creditwatch with negative implications, and the outlook on another three revised to negative.

Until now, such actions had mostly affected the speculative-grade companies, S&P noted.

Following on from a sharp downward revision in its benchmark crude and natural gas price assumptions in January, S&P also lowered the ratings on 25 speculative-grade companies after reviewing 45.

S&P on January 12 slashed its Brent and WTI crude price assumptions to $40/barrel each (from $55 and $50 respectively) and Henry Hub natural gas price assumption to $2.50/MMBtu (from $3).

S&P flagged the "liquidity risks" faced by the smaller E&P companies, "particularly with respect to the April 2016 revolving credit facility bank borrowing base redeterminations."

A borrowing base is the maximum amount of money a bank will lend to an energy company based on the value of its reserves at current market prices.

S&P expects the companies' borrowing bases will have shrunk by 20-30% at the next re-determination in April, as the cutback in drilling activity in 2015 has hobbled their reserves replacement.

Also, more hedges will roll off this year, and the values on the futures curve are below many bank borrowing base prices, S&P credit analysts noted.

As they hunker down, S&P expects many of the companies to continue lowering capital spending and focus on efficiencies and drilling core properties. However, the analysts say, "these actions, for the most part, are insufficient to stem the meaningful deterioration expected in credit measures over the next few years."

The US Energy Information Administration in its short-term market outlook released Feb 9 said it expects US production to fall to an average 8.69 million b/d this year from an average of 9.43 million b/d in 2015. And slip further to 8.46 million b/d in 2017.

But like any forecast, this year's figure could be revised down further. Exactly a year ago, in its February 2015 report, the EIA had estimated 2016 US production at 9.52 million b/d. The agency has progressively whittled down the figure since October last year.

Meanwhile, a total of 67 US oil and gas companies filed for bankruptcy in 2015, according to consultants Gavin/Solmonese, a whopping 379% spike on 2014, CNN reported last week.

Might the other big shadow looming on the markets - Iran - turn out to be a teddy bear?

Iranian businesses continued to be hobbled by the sanctions fallout. Some US clearing banks have warned banks in Europe, Asia and the Middle East that their US-based dollar accounts will face close scrutiny if they do business with Iran.

This has prevented banking transactions with Iran starting up again despite the removal of sanctions, the Financial Times said in this report Feb 14.

Not surprisingly, expectations on the pace of Iran's incremental barrels flowing into the market are taking a more conservative turn. As Platts reporter Robert Perkins highlights in this analysis published Feb 8, a 500,000 b/d immediate rise and 1 million b/d within six months is seen as "wildly optimistic."

Platts calculations based on current market consensus point to a far sober 200,000 b/d rise in the first quarter, growing to 450,000 b/d by year-end.

Excluding Iranian supply, global oil balances are now seen returning to equilibrium by the third quarter of 2016, according to implied market outlooks from the International Energy Agency, the EIA and OPEC.

That brings us to the "dread discount" on oil because of the wider global financial markets panic since the start of the year, triggered in large part by fears over Chinese economic growth.

While impossible to quantify, could the discount evaporate if the global economy performs much better than the doomsday scenarios currently preying on nerves?

To paraphrase Mark Twain, it ain't what the oil markets don't know that will get them into trouble. It's what they know for sure that just ain't so.

–Vandana Hari
Research Scholar, McGraw Hill Financial Global Institute

[Feb 20, 2016] US E P sector sucking wind Is oils equilibrium closer than we think

Notable quotes:
"... Following on from a sharp downward revision in its benchmark crude and natural gas price assumptions in January, S&P also lowered the ratings on 25 speculative-grade companies after reviewing 45. ..."
"... S&P on January 12 slashed its Brent and WTI crude price assumptions to $40/barrel each (from $55 and $50 respectively) and Henry Hub natural gas price assumption to $2.50/MMBtu (from $3). ..."
"... S&P flagged the "liquidity risks" faced by the smaller E&P companies, "particularly with respect to the April 2016 revolving credit facility bank borrowing base redeterminations." ..."
"... S&P expects the companies' borrowing bases will have shrunk by 20-30% at the next re-determination in April, as the cutback in drilling activity in 2015 has hobbled their reserves replacement. ..."
"... The US Energy Information Administration in its short-term market outlook released Feb 9 said it expects US production to fall to an average 8.69 million b/d this year from an average of 9.43 million b/d in 2015. And slip further to 8.46 million b/d in 2017. ..."
Feb 15, 2016 | The Barrel Blog
US E&P sector sucking wind: Is oil's equilibrium closer than we think?

How long does the world have to wait before all the surplus oil sloshing around gets mopped up and prices find an equilibrium point that represents balanced supply and demand? Would you believe it if someone said that might be just a quarter and a bit away?

On the supply side, all bets are on shale to bail: there is no hope of output cuts from OPEC, let alone a coordinated action with other major producers such as Russia, amid a stubborn quest for market share.

If anything, most OPEC members are pumping full tilt and some such as Kuwait and Iraq are eying a production boost this year. A sanctions-free Iran is preparing to offload an additional 0.5-1.0 million b/d on an already oversupplied market, though the pace of that return is highly uncertain.

The question then arises, how long before more US producers buckle under and how sharp might the drop in output be?

Standard & Poors Ratings earlier this month downgraded big names in shale including Chevron, Apache, EOG Resources, Devon, Hess, Marathon and Murphy. Of the 20 "investment-grade" companies the agency reviewed, three were placed on Creditwatch with negative implications, and the outlook on another three revised to negative.

Until now, such actions had mostly affected the speculative-grade companies, S&P noted.

Following on from a sharp downward revision in its benchmark crude and natural gas price assumptions in January, S&P also lowered the ratings on 25 speculative-grade companies after reviewing 45.

S&P on January 12 slashed its Brent and WTI crude price assumptions to $40/barrel each (from $55 and $50 respectively) and Henry Hub natural gas price assumption to $2.50/MMBtu (from $3).

S&P flagged the "liquidity risks" faced by the smaller E&P companies, "particularly with respect to the April 2016 revolving credit facility bank borrowing base redeterminations."

A borrowing base is the maximum amount of money a bank will lend to an energy company based on the value of its reserves at current market prices.

S&P expects the companies' borrowing bases will have shrunk by 20-30% at the next re-determination in April, as the cutback in drilling activity in 2015 has hobbled their reserves replacement.

Also, more hedges will roll off this year, and the values on the futures curve are below many bank borrowing base prices, S&P credit analysts noted.

As they hunker down, S&P expects many of the companies to continue lowering capital spending and focus on efficiencies and drilling core properties. However, the analysts say, "these actions, for the most part, are insufficient to stem the meaningful deterioration expected in credit measures over the next few years."

The US Energy Information Administration in its short-term market outlook released Feb 9 said it expects US production to fall to an average 8.69 million b/d this year from an average of 9.43 million b/d in 2015. And slip further to 8.46 million b/d in 2017.

But like any forecast, this year's figure could be revised down further. Exactly a year ago, in its February 2015 report, the EIA had estimated 2016 US production at 9.52 million b/d. The agency has progressively whittled down the figure since October last year.

Meanwhile, a total of 67 US oil and gas companies filed for bankruptcy in 2015, according to consultants Gavin/Solmonese, a whopping 379% spike on 2014, CNN reported last week.

Might the other big shadow looming on the markets - Iran - turn out to be a teddy bear?

Iranian businesses continued to be hobbled by the sanctions fallout. Some US clearing banks have warned banks in Europe, Asia and the Middle East that their US-based dollar accounts will face close scrutiny if they do business with Iran.

This has prevented banking transactions with Iran starting up again despite the removal of sanctions, the Financial Times said in this report Feb 14.

Not surprisingly, expectations on the pace of Iran's incremental barrels flowing into the market are taking a more conservative turn. As Platts reporter Robert Perkins highlights in this analysis published Feb 8, a 500,000 b/d immediate rise and 1 million b/d within six months is seen as "wildly optimistic."

Platts calculations based on current market consensus point to a far sober 200,000 b/d rise in the first quarter, growing to 450,000 b/d by year-end.

Excluding Iranian supply, global oil balances are now seen returning to equilibrium by the third quarter of 2016, according to implied market outlooks from the International Energy Agency, the EIA and OPEC.

That brings us to the "dread discount" on oil because of the wider global financial markets panic since the start of the year, triggered in large part by fears over Chinese economic growth.

While impossible to quantify, could the discount evaporate if the global economy performs much better than the doomsday scenarios currently preying on nerves?

To paraphrase Mark Twain, it ain't what the oil markets don't know that will get them into trouble. It's what they know for sure that just ain't so.

–Vandana Hari
Research Scholar, McGraw Hill Financial Global Institute

[Feb 20, 2016] Iran turn out to be a teddy bear

Notable quotes:
"... Iranian businesses continued to be hobbled by the sanctions fallout. Some US clearing banks have warned banks in Europe, Asia and the Middle East that their US-based dollar accounts will face close scrutiny if they do business with Iran. This has prevented banking transactions with Iran starting up again despite the removal of sanctions, the Financial Times said in this report Feb 14. ..."
"... Platts reporter Robert Perkins highlights in this analysis published Feb 8, a 500,000 b/d immediate rise and 1 million b/d within six months is seen as "wildly optimistic." ..."
"... Platts calculations based on current market consensus point to a far sober 200,000 b/d rise in the first quarter, growing to 450,000 b/d by year-end. ..."
"... Excluding Iranian supply, global oil balances are now seen returning to equilibrium by the third quarter of 2016, according to implied market outlooks from the International Energy Agency, the EIA and OPEC. ..."
February 15, 2016 | The Barrel Blog

Might the other big shadow looming on the markets - Iran - turn out to be a teddy bear?

Iranian businesses continued to be hobbled by the sanctions fallout. Some US clearing banks have warned banks in Europe, Asia and the Middle East that their US-based dollar accounts will face close scrutiny if they do business with Iran. This has prevented banking transactions with Iran starting up again despite the removal of sanctions, the Financial Times said in this report Feb 14.

Not surprisingly, expectations on the pace of Iran's incremental barrels flowing into the market are taking a more conservative turn. As Platts reporter Robert Perkins highlights in this analysis published Feb 8, a 500,000 b/d immediate rise and 1 million b/d within six months is seen as "wildly optimistic."

Platts calculations based on current market consensus point to a far sober 200,000 b/d rise in the first quarter, growing to 450,000 b/d by year-end.

Excluding Iranian supply, global oil balances are now seen returning to equilibrium by the third quarter of 2016, according to implied market outlooks from the International Energy Agency, the EIA and OPEC.

That brings us to the "dread discount" on oil because of the wider global financial markets panic since the start of the year, triggered in large part by fears over Chinese economic growth.

While impossible to quantify, could the discount evaporate if the global economy performs much better than the doomsday scenarios currently preying on nerves?

To paraphrase Mark Twain, it ain't what the oil markets don't know that will get them into trouble. It's what they know for sure that just ain't so.

–Vandana Hari
Research Scholar, McGraw Hill Financial Global Institute

[Feb 17, 2016] Financial chaos coming to oil junk bonds

Notable quotes:
"... There are over $1.8 trillion of US junk bonds outstanding. It's the lifeblood of over-indebted corporate America. When yields began to soar over a year ago, and liquidity began to dry up at the bottom of the scale, it was "contained." ..."
"... The average yield of CCC or lower-rated junk bonds hit the 20% mark a week ago. The last time yields had jumped to that level was on September 20, 2008, in the panic after the Lehman bankruptcy, as we pointed out . Today, that average yield is nearly 22%! ..."
"... Today the scenario is punctuated by defaults, debt restructurings with big haircuts, and bankruptcy filings. These risks had been there all along. But "consensual hallucination," as we've come to call the phenomenon, blinded investors, among them hedge funds, private equity firms, bond mutual funds for retail investors, and other honorable members of the "smart money." ..."
"... The M&A-related bond issue by Endurance International Group couldn't be syndicated and ended up on the balance sheets of the underwriters. ..."
"... The market was hit hard again this week amid solid volume trading as oil prices plunged anew. There was a meager attempt at stability on Wednesday, but some participants described it as similar to the calm at the eye of a hurricane. ..."
"... And retail investors are catching on. Over the past three sessions alone, they pulled $488 million out of the largest high-yield ETF, the iShares HYG, which on Thursday closed at 75.59, down 21% from its high in June 2014, and the lowest level since May 2009. ..."
"... All grades of junk bonds have been losing ground: the S&P High-Yield Index is down 3.9% year-to-date. But it's in the CCC-and-lower category where real bloodletting is occurring. ..."
"... It's not just energy. The category includes all kinds of companies, among them brick-and-mortar retailers and restaurants, hit hard by excessive debt, slack demand, consumer preference for online shopping, and other scourges. Unlike oil and gas drillers, these companies have no assets to sell. Standard & Poor's "believes these trends will accelerate in the coming year and lead to further retail defaults." ..."
"... All the Central Bank stimulus programs have been Neo-Keynesian, in line with the new economics. The money is pushed into the top of the economic pyramid, the banks, and according to the new economics it should trickle down. ..."
"... I see a storm brewing. A huge economic tsunami will occur when the financial sector collapses. The question is not if this will occur but when and how bad it will be. The severity is bound to be intense and long term as Congress is hidebound by ideological stances that are the origination of the Tsunami. The Fed has run out of strategies that actually have any positive effect. ..."
"... Not to diminish the concerns Wolf has expressed here or the related causal factors, but staff at the Atlanta Fed is forecasting sharply improving economic activity this quarter. ..."
"... But "consensual hallucination," as we've come to call the phenomenon, blinded investors, among them hedge funds, private equity firms, bond mutual funds for retail investors, and other honorable members of the "smart money." ..."
"... Please explain how "smart money" is losing on this "hallucination." Oh, maybe you mean the Private Equity LPs or the retail investors in the Mutual Funds, or the investors in the hedge funds. They aren't the smart money. The smart money is playing this game for all it is worth and is not losing out. ..."
Feb 13, 2016 | nakedcapitalism.com
Posted on February 13, 2016 by Yves Smith By Wolf Richter, a San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience. Originally published at Wolf Street

It's not contained.

There are over $1.8 trillion of US junk bonds outstanding. It's the lifeblood of over-indebted corporate America. When yields began to soar over a year ago, and liquidity began to dry up at the bottom of the scale, it was "contained."

Yet contagion has spread from energy, metals, and mining to other industries and up the scale. According to UBS, about $1 trillion of these junk bonds are now "stressed" or "distressed." And the entire corporate bond market, which is far larger than the stock market, is getting antsy.

The average yield of CCC or lower-rated junk bonds hit the 20% mark a week ago. The last time yields had jumped to that level was on September 20, 2008, in the panic after the Lehman bankruptcy, as we pointed out . Today, that average yield is nearly 22%!

Today even the average yield spread between those bonds and US Treasuries has breached the 20% mark. Last time this happened was on October 6, 2008, during the post-Lehman panic:

US-Junk-bond-spreads-CCC-2008_2016-02-11

At this cost of capital, companies can no longer borrow. Since they're cash-flow negative, they'll run out of liquidity sooner or later. When that happens, defaults jump, which blows out spreads even further, which is what happened during the Financial Crisis. The market seizes. Financial chaos ensues.

It didn't help that Standard & Poor's just went on a "down-grade binge," as S&P Capital IQ LCD called it, hammering 25 energy companies deeper into junk, 11 of them into the "substantial-risk" category of CCC+ or below.

Back in the summer of 2014, during the peak of the wild credit bubble beautifully conjured up by the Fed, companies in this category had no problems issuing new debt in order to service existing debt, fill cash-flow holes, blow it on special dividends to their private-equity owners, and what not. The average yield of CCC or lower rated bonds at the time was around 8%.

Today the scenario is punctuated by defaults, debt restructurings with big haircuts, and bankruptcy filings. These risks had been there all along. But "consensual hallucination," as we've come to call the phenomenon, blinded investors, among them hedge funds, private equity firms, bond mutual funds for retail investors, and other honorable members of the "smart money."

But now that they've opened their eyes, they're running away. And so the market for new issuance is grinding down.

"Another tough week," S&P Capital IQ LCD said on Thursday in its HY Weekly . There was one small deal earlier this week: Manitowoc Cranes' $260 million B+ rated second-lien notes that mature in 2021 sold at a yield of 14%!

The M&A-related bond issue by Endurance International Group couldn't be syndicated and ended up on the balance sheets of the underwriters. LeasePlan has a $500 million deal on the calendar. If it goes today, it will bring the total this week to a measly $760 million, down 90% from the four-year average for the second week in February. According to S&P Capital IQ LCD, it would be "the lowest amount of early-February issuance since the credit crisis in 2009."

In the secondary market, where the high-yield bonds are traded, it's equally gloomy. S&P Capital IQ LCD:

The market was hit hard again this week amid solid volume trading as oil prices plunged anew. There was a meager attempt at stability on Wednesday, but some participants described it as similar to the calm at the eye of a hurricane.

That proved true today, as markets fell further. There was red across the board with losses in dollar terms ranging 1–5 points, depending on the credit and sector. The huge U.S. Treasury market rally gave no technical support, even as the yield on the 10-year note, for one, pierced 1.6%, a 4.5-year low.

And retail investors are catching on. Over the past three sessions alone, they pulled $488 million out of the largest high-yield ETF, the iShares HYG, which on Thursday closed at 75.59, down 21% from its high in June 2014, and the lowest level since May 2009.

On a broader scale, investors yanked $5.6 billion out of that asset class in January, the fourth month in a row of outflows.

All grades of junk bonds have been losing ground: the S&P High-Yield Index is down 3.9% year-to-date. But it's in the CCC-and-lower category where real bloodletting is occurring.

This chart shows the return from interest payments and price changes of that category. Since June 2014, the index has lost 28%. During the panic of the Financial Crisis, it plunged 48%. But now the volume of junk bonds outstanding is twice as large and the credit bubble is far bigger than it had been before the Financial Crisis. So this might just be the beginning:

US-Junk-bonds-CCC-total-return-2014-2016_02_11

It's not just energy. The category includes all kinds of companies, among them brick-and-mortar retailers and restaurants, hit hard by excessive debt, slack demand, consumer preference for online shopping, and other scourges. Unlike oil and gas drillers, these companies have no assets to sell. Standard & Poor's "believes these trends will accelerate in the coming year and lead to further retail defaults."

S&P now expects the overall default rate to reach 3.9% by the end of 2016. But it may be the rosy scenario; last March, S&P still thought the default rate at the end of 2016 would be 2.8%. Credits are deteriorating fast.

Among these CCC-rated retailers and restaurants are Claire's Stores, Logan's Roadhouse, and the Bon-Ton Department Stores. Others, at B-, are just a downgrade away, such as Toys "R" Us, 99 Cents Only Stores, or P.F. Chang's China Bistro. Some are rated B, such as Men's Wearhouse and Neiman Marcus. If these companies need money, it's going to get very expensive.

And contagion is spreading to high-grade bonds: issuance so far in February plunged 90% to just $5 billion, from the same period a year ago. Year-to-date issuance was inflated by one monster deal carried over from last year, the $46-billion M&A-driven trade for Anheuser-Busch InBev, bringing the total to $126.5 billion, still down 13%. S&P Capital IQ LCD:

Severe broad market volatility shuttered the investment-grade primary market for a fifth consecutive session Thursday, as secondary-market spreads continued to widen.

But when there is blood in the streets, there are opportunities though perhaps not in the usual corners. Read… What's Booming in this Economy? Bankruptcy & Restructuring Business "Highest Since Great Recession"

Clive , February 13, 2016 at 6:58 am

If policy makers wanted to understand the irrelevance of ZIRP or NIRP in the world where real businesses and people live, they only have to read this article.

craazyboy , February 13, 2016 at 10:08 am

Obviously, if the Fed does a -2% NIRP, then we can get the average junk bond down from 22% to 20%. It's all just simple math.

Michael Haltman , February 13, 2016 at 7:15 am

And don't forget the risk that's posed by the sovereign debt issued by the EU PIIGS:

Are The EU PIIGS About To Start Squealing?

As the migrant crisis in Europe worsens serious steps to address it are being considered.

One proposal is for passports to be required in order to cross from one EU country to another.

Would such a drastic move spell the beginning of the end for the Eurozone as a viable entity?

And if so what will happen to the piles of sovereign debt that's been issued by the economically vulnerable EU PIIGS, and to the investors who have been pouring money into them at what appear to be ridiculously low yields?

Read the story and check out the historical yield chart at the article 'EU PIIGS: Are These 10-Year Sovereign Bond Yields Either Warranted Or Sustainable?' here: https://www.linkedin.com/pulse/eu-piigs-10-year-sovereign-bond-yields-either-michael-haltman?trk=prof-post

Keith , February 13, 2016 at 7:31 am

Bring in nonsense economics globally and let it destroy everything.

Today's nonsense economics:

1) Ignores the true nature of money and debt

Debt is just taking money from the future to spend today.

The loan/mortgage is taken out and spent; the repayments come in the future.

Today's boom is tomorrow's penury and tomorrow is here.

One of the fundamental flaws in the economists' models is the way they treat money, they do not understand the very nature of this most basic of fundamentals.

They see it as a medium enabling trade that exists in steady state without being created, destroyed or hoarded by the wealthy.

They see banks as intermediaries where the money of savers is leant out to borrowers.

When you know how money is created and destroyed on bank balance sheets, you can immediately see the problems of banks lending into asset bubbles and how massive amounts of fictitious, asset bubble wealth can disappear over-night.

When you take into account debt and compound interest, you quickly realise how debt can over-whelm the system especially as debt accumulates with those that can least afford it.

a) Those with excess capital invest it and collect interest, dividends and rent.
b) Those with insufficient capital borrow money and pay interest and rent.

Add to this the fact that new money can only be created from new debt and the picture gets worse again.

With this ignorance at the heart of today's economics, bankers worked out how they could create more
and more debt whilst taking no responsibility for it. They invented securitisation and complex financial instruments to package up their debt and sell it on to other suckers (the heart of 2008).

2) Doesn't differentiate between "earned" and "unearned" wealth

Adam Smith:

"The Labour and time of the poor is in civilised countries sacrificed to the maintaining of the rich in ease and luxury. The Landlord is maintained in idleness and luxury by the labour of his tenants. The moneyed man is supported by his extractions from the industrious merchant and the needy who are obliged to support him in ease by a return for the use of his money. But every savage has the full fruits of his own labours; there are no landlords, no usurers and no tax gatherers."

Like most classical economists he differentiated between "earned" and "unearned" wealth and noted how the wealthy maintained themselves in idleness and luxury via "unearned", rentier income from their land and capital.

We can no longer see the difference between the productive side of the economy and the unproductive, parasitic, rentier side.

The FIRE (finance, insurance and real estate) sectors now dominate the UK economy and these are actually parasites on the real economy.

Constant rent seeking, parasitic activity from the financial sector.

Siphoning off the "earned" wealth of generation rent to provide "unearned" income for those with more Capital, via BTL.

Housing booms across the world sucking purchasing power from the real economy through high rents and mortgage payments.

Michael Hudson "Killing the Host"

3) Today's ideal is unregulated, trickledown Capitalism.

We had un-regulated, trickledown Capitalism in the UK in the 19th Century.

We know what it looks like.

1) Those at the top were very wealthy
2) Those lower down lived in grinding poverty, paid just enough to keep them alive to work with as little time off as possible.
3) Slavery
4) Child Labour

Immense wealth at the top with nothing trickling down, just like today.

This is what Capitalism maximized for profit looks like.

Labour costs are reduced to the absolute minimum to maximise profit.

(The majority got a larger slice of the pie through organised Labour movements.)

The beginnings of regulation to deal with the wealthy UK businessman seeking to maximise profit, the abolition of slavery and child labour.

Where regulation is lax today?
Apple factories with suicide nets in China.

The modern business person chases around the world to find the poorest nation with the laxest regulations so they can exploit these people in the same way they used to exploit the citizens of their own nations two hundred years ago.

Labour costs are reduced to the absolute minimum to maximise profit.

Capitalism in its natural state sucks everything up to the top.
Capitalism in its natural state doesn't create much demand.

Keith , February 13, 2016 at 7:48 am

There is more than one version of Capitalism, and today's version is an upside down version of the one we had 40 years ago that produced the lowest levels of inequality in history within the developed world.

40 years ago most economists and almost everyone else believed the economy was demand driven and the system naturally trickled up.

Now most economists and almost everyone else believes the economy is supply driven and the system naturally trickles down.

Economics has been turned upside down in the last 40 years.

All the Central Bank stimulus programs have been Neo-Keynesian, in line with the new economics. The money is pushed into the top of the economic pyramid, the banks, and according to the new economics it should trickle down.

What we have seen is that the money stays at the top inflating asset bubbles in stocks, fine art, classic cars and top end property.

Businessmen believe in the new economics when it comes to keeping all the rewards for themselves and shareholders.

Businessmen believe in the old economics when it come to investing and won't invest until demand rises.

The new economics has taken us back to a disastrous past.

You think the 1930s is bad?

In the 1940s you get global war.

Ray Phenicie , February 13, 2016 at 8:58 am

I see a storm brewing. A huge economic tsunami will occur when the financial sector collapses. The question is not if this will occur but when and how bad it will be. The severity is bound to be intense and long term as Congress is hidebound by ideological stances that are the origination of the Tsunami. The Fed has run out of strategies that actually have any positive effect.

Chauncey Gardiner , February 13, 2016 at 10:31 am

Not to diminish the concerns Wolf has expressed here or the related causal factors, but staff at the Atlanta Fed is forecasting sharply improving economic activity this quarter.

Although I only began tracking their work during the past year, I have been impressed by the accuracy of their recent GDP forecasts:

https://www.frbatlanta.org/cqer/research/gdpnow.aspx

Should their forecast be accurate and have legs, perhaps it will reduce the severity of the issues Wolf discussed, at least in the short term.

jrd2 , February 13, 2016 at 10:39 am

But "consensual hallucination," as we've come to call the phenomenon, blinded investors, among them hedge funds, private equity firms, bond mutual funds for retail investors, and other honorable members of the "smart money."

Please explain how "smart money" is losing on this "hallucination." Oh, maybe you mean the Private Equity LPs or the retail investors in the Mutual Funds, or the investors in the hedge funds. They aren't the smart money. The smart money is playing this game for all it is worth and is not losing out.

[Feb 17, 2016] Oil prices surge as Iran says it supports crude output freeze

RT Business

Brent crude futures trading at the Intercontinental Exchange (ICE) in London surged over 7.5 percent after Iran declared its support for the oil output freeze. Despite expressing its backing for the step, Tehran has not made any pledges to curb to its own production.

After the initial rise, the positive market trend ended a few minutes later, with the gain then dropping to around 6.2 percent.

WTI futures in New York also saw a reverse in earlier losses, gaining as much as 6.3 percent, according to Bloomberg.

On Wednesday, Tehran expressed its support for the plan to freeze oil production levels, which was put forward by Russia and Saudi Arabia a day earlier.

After meeting with energy ministers from other top crude oil producers, Iran's Oil Minister Bijan Namdar Zanganeh said the country supported the measures that aim to prevent a further drop in oil prices.

Iran backs the proposal, Iranian Shana news agency reported. However, the minister did not specify whether Tehran would curb its own crude production.
Following the Moscow-Riyadh output agreement, Zanganeh met with his counterparts from Iraq, Qatar and Venezuela in the Iranian capital. He assessed the meeting as being positive, TASS news agency reported.

With three OPEC members – Qatar, Venezuela and Kuwait – already having said they are ready to freeze output at January levels, and the UAE saying it's open to cooperation, the fate of the initiative now mostly depends on Iran's participation.

[Feb 16, 2016] The money crunch is hitting just as U.S. production is starting to decline

Notable quotes:
"... The money crunch is hitting just as U.S. production is starting to decline. On Tuesday, the Energy Information Administration estimated that production is down 600,000 barrels per day since April; the agency expects production to fall at least that much again by the end of the year. Without a cash infusion, those declines will only accelerate. ..."
"... If production is falling, does that mean oil prices are going to go back up? Maybe. A popular argument in the oil patch is that the pullback in investment is sowing the seeds for the next surge in prices; oil companies won't be able to boost production quickly enough when it's needed, leading to higher prices. But even if that argument is right, it could take years for such a rebalancing to occur. And besides, as I've argued before, the conventional wisdom on oil is (almost) always wrong . ..."
fivethirtyeight.com
Oil companies have survived low prices this long because banks and investors were willing to lend them billions of dollars on the assumption that the price plunge would be short-lived. But as experts become increasingly convinced that prices will stay low for years, Wall Street is turning off the money spigot. (It doesn't help that the global economic slowdown is making banks more cautious, while the Fed's decision to raise interest rates is making borrowing more expensive.)

The money crunch is hitting just as U.S. production is starting to decline. On Tuesday, the Energy Information Administration estimated that production is down 600,000 barrels per day since April; the agency expects production to fall at least that much again by the end of the year. Without a cash infusion, those declines will only accelerate.

If production is falling, does that mean oil prices are going to go back up? Maybe. A popular argument in the oil patch is that the pullback in investment is sowing the seeds for the next surge in prices; oil companies won't be able to boost production quickly enough when it's needed, leading to higher prices. But even if that argument is right, it could take years for such a rebalancing to occur. And besides, as I've argued before, the conventional wisdom on oil is (almost) always wrong.

[Feb 16, 2016] The US bet big on American oil and now the whole global economy is paying the price

Notable quotes:
"... At the beginning of 2014, the world was marveling in surprise as the US returned as a petroleum superpower, a role it had relinquished in the early 1970s. It was pumping so much oil and gas that experts foresaw a new American industrial renaissance, with trillions of dollars in investment and millions of new jobs. wo years later, faces are aghast as the same oil has instead unleashed world-class havoc: Just a month into the new year, the Dow Jones Industrial Average is down 5.5%. Japan's Nikkei has dropped 8%, and the Stoxx Europe 600 is 6.4% lower. ..."
"... that companies would put on hold $380 billion (and counting) in oil and natural gas field investment, and fire 250,000 industry workers around the world last year (including around 90,000 in the US). ..."
"... A lot of Americans bought houses based on confidence in the boom, and now can't make their payments -Texas has seen a 15% rise in foreclosures, and Oklahoma a whopping 36% increase, according to estimates from RealtyTrac. Morningstar, the rating agency, has put a third of some $340 million in mortgage-backed securities tied to North Dakota apartment buildings and other commercial properties on its watch list for possible default. ..."
Feb 01, 2016 | qz.com

At the beginning of 2014, the world was marveling in surprise as the US returned as a petroleum superpower, a role it had relinquished in the early 1970s. It was pumping so much oil and gas that experts foresaw a new American industrial renaissance, with trillions of dollars in investment and millions of new jobs. wo years later, faces are aghast as the same oil has instead unleashed world-class havoc: Just a month into the new year, the Dow Jones Industrial Average is down 5.5%. Japan's Nikkei has dropped 8%, and the Stoxx Europe 600 is 6.4% lower. The blood on the floor even includes fuel-dependent industries that logic suggests should be prospering, such as airlines.

... ... ...

The analysts defend themselves by noting that they got this and that aspect of oil's trajectory right, which is fair enough. But it seems all missed the big picture: First, they failed to see that from 2011 to 2014, a surge in shale oil production was going to become a big factor in global supplies; then, they did not anticipate that the same oil would create the mayhem before us now. In fact, in the case of the current turmoil, most forecast the precise opposite-economic nirvana. Interviews with the main institutions that made the bad calls reveal no crisis of confidence, and they are busy putting out analyses of the latest developments.

... ... ...

Consumers have been big winners-gasoline prices have plummeted. That part has happened. But analysts failed to anticipate that the Saudis would refuse to cooperate with the shale gale, as it's been dubbed, and in fact would declare war on it, even though Riyadh did precisely the same thing in the 1980s. The analysts did not foretell that, if shale oil production rose as they projected, it could drive down prices not only to the $80-a-barrel average that many forecast, but much lower-so low, for so long (see chart below), that companies would put on hold $380 billion (and counting) in oil and natural gas field investment, and fire 250,000 industry workers around the world last year (including around 90,000 in the US).

... ... ...

Nor did they foresee that many of the companies themselves would be at risk of bankruptcy (42 already filed as of last year). Of 155 US oil and gas companies studied by Standard & Poor's, one third are rated B- or less, meaning they are a high risk of default. These companies' debt is selling at just 56 cents on the dollar, below even the level during the financial crash. As a measure of this vulnerability, the 60 leading US independent oil and gas companies have accumulated $200 billion in debt.

... ... ...

With the collapse in oil prices came the crash of employment in US cities across Louisiana, North Dakota, and Texas, and in Canadian towns reliant on the oil sands boom in Alberta. North Dakota has lost an estimated 13,500 roughnecks and oil engineers, not to mention drivers, restaurant cooks, barbers, and grocery store cashiers in service businesses that sprouted up around them. The Canadian province of Alberta has lost some 20,000 jobs, the most in any industry downturn since the early 1980s.

A lot of Americans bought houses based on confidence in the boom, and now can't make their payments-Texas has seen a 15% rise in foreclosures, and Oklahoma a whopping 36% increase, according to estimates from RealtyTrac. Morningstar, the rating agency, has put a third of some $340 million in mortgage-backed securities tied to North Dakota apartment buildings and other commercial properties on its watch list for possible default.

But the echo has also been heard far from the US shale patch. In the once-booming, toughly run petro-state of Azerbaijan, for instance, people have been in the streets to protest higher prices and lost jobs; the International Monetary Fund, worried about Azerbaijan's possible collapse, is speaking with government officials about a $3 billion bailout.

Soup kitchens are surfacing in Moscow, notwithstanding Russian president Vladimir Putin's assertions that the country is coping fine, and that things will improve this year. African producers also have felt the pain. Like stock bourses around the world, Nigeria's has tanked along with oil prices.

[Feb 16, 2016] Tehran is continuing its battle for market share with the Saudis by cutting its price for heavy crude going to Mediterranean customers by more than a recent Saudi cut

Peak Oil Review

Iran: Tehran is continuing its battle for market share with the Saudis by cutting its price for heavy crude going to Mediterranean customers by more than a recent Saudi cut. The selling price for Iranian Heavy crude is now set at $6.40 below the Brent Weighted Average. For Northwest Europe and South Africa the price is now $6.30 below the Brent Average as compared to $6.00 for Arab crude. This may only be the beginning of price wars between Iran and the Gulf Arabs as Tehran battles to regain the market share it held before the sanctions were imposed.

The postponement of a conference in London at which Tehran was to announce its terms for foreign oil companies wanting to invest in developing Iranian oil shows that there is considerable infighting within the Iranian ruling class. Although the Iranians tried to blame the postponement on troubles getting visas for all the Iranians who wanted to attend, the delay likely was forced by hardline opponents of the Rouhani government who say the proposed agreements violate Iran's constitution which decrees that none of Iran's oil reserves can be owned for foreigners. Iran is seeking some $200 billion in foreign investment to increase its production to 4-5 million b/d. Given the low oil prices, Iran is unlikely to be capable of accumulating the capital to make major increases in its oil production. Some believe the domestic political situation will become worse after the elections when the hardliners make an effort to gain take more control over the oil industry away from moderate President Rouhani and his government.

The lifting of the sanctions my not turn out to be as much of a boom for Iran's economy as many Iranians had hoped. It is doubtful that in these tough times for the oil industry many international oil companies will be interested in deals in which they supply the money and take the risks while allowing the Iranians all the control and most of the benefits from the projects.

In the meantime, Iran is demanding payment for its oil in euros rather than dollars in order to stick it to Washington. The problems of insuring cargoes of Iranian oil, however, seem to be easing. Washington will now allow non-US persons to insure crude and oil products coming from or going to Iran.

[Feb 10, 2016] Insurance Concerns Could Throw Wrench In Iranian Oil Exports

OilPrice.com

Trading giant Vitol says it's already buying Iranian oil, several European oil companies have already chartered tankers for Iranian crude. Total SA has reportedly signed an agreement with Iran to buy 160,000 barrels per day effective from the 16th of February.

Spanish refiner Compania Espanola de Petroleos has booked some provisional Iranian crude cargoes to land in European ports, according to Bloomberg, and Glencore Plc trading house bought a cargo earlier this month.

But Lukoil's trading arm, Swiss-based Litasco, has cancelled its booking of an Iranian cargo to Italy over insurance complications, according to Reuters.

Japan is a step ahead of other prospective importers of Iranian oil. In 2012, Japan's Parliament approved government guarantees on insurance for Iranian crude oil cargoes, circumventing European Union sanctions and allowing for the provision of up to $7.6 billion in coverage for each Iranian crude oil tanker bound for Japan. But that law expires on 31 March, so it may have to go back to parliament for approval if the West hasn't sorted things out by then.

The London-based International Group of Protection & Indemnity Clubs, which covers some 90 percent of global tonnage through reinsurance, is reportedly in talks with Washington to figure a way out of the insurance quagmire quickly, according to the Wall Street Journal.

[Feb 08, 2016] Iran Signs Oil Deal With European Refiner as Sanctions End

January 22, 2016 | Bloomberg Business

Iran signed an agreement to supply crude oil with Hellenic Petroleum SA, a Greek oil refinery, in what may be the Persian Gulf producer's first such deal with a European company since the removal of international sanctions this month.

Deliveries will begin immediately, Hellenic Petroleum said in an e-mailed statement on Friday. The agreement also includes an adjustment for a financial backlog owed to Iran's state oil company after sanctions imposed four years ago, according to the statement. Iran's Deputy Oil Minister Amir Hossein Zamaninia discussed potential energy co-operation with Greek Energy Minister Panos Skourletis earlier on Friday in Athens.

The oil market is bracing itself for a ramp up in supplies from Iran amid a global supply glut that pushed prices down to a 12-year low. Oil analysts surveyed by Bloomberg anticipate the nation will ship 100,000 barrels a day more crude within a month of sanctions ending, and four times that within half a year. Iran says it will boost exports by 500,000 barrels a day right away.

Europe had been Iran's second-biggest oil customer before sanctions were introduced, purchasing nearly 600,000 barrels a day from the Middle East nation in 2011, according to the U.S. Energy Information Administration. Greece was one of the biggest European importers, buying about 120,000 barrels a day in 2011, data from the International Energy Agency shows.

The return of Iranian oil could send prices even lower, as it fills in the gap left by the decline in U.S. shale production, the IEA warned on Jan. 19. Flows of Iranian crude to Europe may displace similar grades sold by Russia and Iraq, which may in turn be diverted to the U.S., Citigroup Inc. predicts.

European oil companies such as Royal Dutch Shell Plc, Eni SpA and Total SA have said they're interested in returning to Iran to develop its oil reserves, which are the fourth-biggest in the world.

[Feb 08, 2016] Iran Signs Oil Deal With Total, Deal Done In Euros by Charles Kennedy

Notable quotes:
"... Deals signed just over a week ago when Iranian President Hassan Rouhani met his French counterpart, Francois Hollande, in Paris included some 20 agreements and a $25-billion accord under which Iran will purchase 73 long-haul and 45 medium-haul Airbus passenger planes to update its ageing fleet. Carmaker Peugeot-which was forced to pull out of Iran in 2012--also agreed to return to the Iranian market in a five-year deal worth $436 million. ..."
"... In the reverse flow of the new deal, Total has agreed to buy between 150,000 and 200,000 barrels of Iranian crude a day, with company officials also noting that Total would be looking at other opportunities as well in oil, gas, petrochemicals and marketing. ..."
"... According to Iranian media , Total will start importing 160,000 barrels per day in line with a contract that takes effect already on 16 February. ..."
"... Total will likely want back in on this project, and buying Iranian oil surely helps. And Iran, likewise, is eagerly seeking out European markets, with the Iranian Oil Ministry now saying that it's crude oil sales to Europe have exceeded 300,000 barrels per day , counting the Total deal. ..."
"... Iran has recently signed oil contracts not only with French Total, but also with Russian Lukoil's trading arm, Litasco, and Spanish refiner Cepsa. The Ministry says that Italian oil giant Eni is interested in buying 100,000 bpd from Iran, and that such a contract will be discussed soon in Tehran. ..."
"... Iran is seeking to bill its new crude oil sales in euros in order to reduce dependence on the U.S. dollar, the news agency reported, citing an anonymous NIOC source. ..."
"... Washington is not going to appreciate this additional threat to the petro dollar . This would add Iran to the growing list of countries that, over the past few years, have begun to pose a challenge to the current system by forming pacts to transact oil in local currencies. ..."
finance.yahoo.com

As Airbus and Peugeot finally return to post-sanctions Iran, the trade-off is Iranian oil, with French Total SA taking the plunge in an agreement to buy up to 200,000 barrels per day of Iranian crude--but the catch is that sales will be in euros.

Deals signed just over a week ago when Iranian President Hassan Rouhani met his French counterpart, Francois Hollande, in Paris included some 20 agreements and a $25-billion accord under which Iran will purchase 73 long-haul and 45 medium-haul Airbus passenger planes to update its ageing fleet. Carmaker Peugeot-which was forced to pull out of Iran in 2012--also agreed to return to the Iranian market in a five-year deal worth $436 million.

In the reverse flow of the new deal, Total has agreed to buy between 150,000 and 200,000 barrels of Iranian crude a day, with company officials also noting that Total would be looking at other opportunities as well in oil, gas, petrochemicals and marketing.

According to Iranian media, Total will start importing 160,000 barrels per day in line with a contract that takes effect already on 16 February.

Total never really left Iran, though. While it stopped all oil exploration and production activities there in 2010, making it one of the last to withdraw, it still maintained an office there.

Since 1990, Total has been a key investor in Iranian energy, playing a role in the development of Iran's Sirri A&E oil and South Pars gas projects. Sanctions also halted its planned involvement in the LNG project linked to Iran's South Pars Phase 11.

But Total's work in Iran hasn't been without its problems-even without sanctions.

In May 2013, Total agreed to pay $398.2 million to settle U.S. criminal and civil allegations that it paid bribes to win oil and gas contracts in Iran. U.S. authorities claimed that between 1995 and 2004, Total paid about $60 million in bribes to an Iranian government official to win lucrative development rights in three South Pars project oil and gas fields. While French prosecutors had recommended that Total and its then-CEO, Christophe de Margerie, be tried on these charges, De Margerie's premature death in a Moscow plane crash put paid to that and the case was discontinued.

At stake here is Iran's prized South Pars, which holds some 14 trillion cubic meters of natural gas and 18 billion barrels of gas condensates. Or in other words, 7.5 percent of the world's natural gas and half of Iran's total reserves.

And Phase 11 of this project is what the supermajors are eyeing. Total was dismissed from Phase 11 in 2009 and its portion of the project was awarded to China National Petroleum Corporation (CNPC), which then pulled out in 2012 under the bite of sanctions. In September 2015, the National Iranian Oil Company (NIOC) transferred the uncompleted portions of Phase 11 to Iranian companies.

Total will likely want back in on this project, and buying Iranian oil surely helps. And Iran, likewise, is eagerly seeking out European markets, with the Iranian Oil Ministry now saying that it's crude oil sales to Europe have exceeded 300,000 barrels per day, counting the Total deal.

Iran has recently signed oil contracts not only with French Total, but also with Russian Lukoil's trading arm, Litasco, and Spanish refiner Cepsa.

The Ministry says that Italian oil giant Eni is interested in buying 100,000 bpd from Iran, and that such a contract will be discussed soon in Tehran.

But there is a catch, as reported by Reuters. Iran is seeking to bill its new crude oil sales in euros in order to reduce dependence on the U.S. dollar, the news agency reported, citing an anonymous NIOC source.

Washington is not going to appreciate this additional threat to the petro dollar. This would add Iran to the growing list of countries that, over the past few years, have begun to pose a challenge to the current system by forming pacts to transact oil in local currencies.

By Charles Kennedy for Oilprice.com

[Feb 03, 2016] President Rouhani stormed around Europe signing oil contracts and spending Iran freed up cash

Notable quotes:
"... Tehran had a big week as President Rouhani stormed around Europe signing oil contracts and spending Iran's windfall of newly freed up cash by making many major purchases. In Italy, he signed deals including shipbuilding, steel, and energy worth some $18 billion. In France, he bought 118 Airbus airliners for $24 billion, made a $400 million car manufacturing deal with Peugeot, and signed a deal with Total for 200,000 b/d of Iranian crude. This should help Rouhani in the upcoming elections as a man who keeps his promises to revive the Iranian economy. ..."
www.resilience.org
Iran:

Tehran had a big week as President Rouhani stormed around Europe signing oil contracts and spending Iran's windfall of newly freed up cash by making many major purchases. In Italy, he signed deals including shipbuilding, steel, and energy worth some $18 billion. In France, he bought 118 Airbus airliners for $24 billion, made a $400 million car manufacturing deal with Peugeot, and signed a deal with Total for 200,000 b/d of Iranian crude. This should help Rouhani in the upcoming elections as a man who keeps his promises to revive the Iranian economy.

Beijing is making a major effort to improve its relations with Tehran. During the sanctions, China continued to build a new $200 million steel mill for the Iranians, circumventing the restrictions imposed by the US and Europe. Last week a freight train set off on the 6,000 mile trip to Tehran from eastern China, marking the first rail connection between the two countries along the new "silk road." China is hoping that Iran will become a major gateway for selling its products into the Middle East and will become a source of oil.

Based on tanker loading schedules, Tehran is due to increase its oil exports in January and February by 20 percent over last year. Iran's exports look to be about 1.5 million b/d in January and 1.4 million in February. This compares with an average of 1.2 million b/d last year. Much of this oil was already stored on tankers which provided storage for unsold crude during the sanctions. How much oil was in storage has been debated, but a recent Reuters report puts the amount at 40 million barrels– mostly condensate which has to be sold quickly to free up Iran's tankers for regular crude deliveries. Many western shippers still have concerns about doing business with Tehran as there are still numerous sanctions in place which could lead to heavy penalties for doing business with Iranians, especially if the Republican Guard is somehow involved.

[Jan 30, 2016] Iran will receive approximately $55 billion in sanctions relief once the nuclear deal is implemented

Notable quotes:
"... He explained that Iran will not be able to access much of its money that has been locked up overseas due to sanctions because the money has already been committed elsewhere. ..."
"... On Wednesday, Lew estimated that Iran's demand for domestic investment surpasses $500 billion, and that it will cost between $100 billion and $200 billion to restore production levels in its oil and gas sector. ..."
www.theguardian.com

tigressnsnow 30 Jan 2016 19:01

Why do Republicans put out the notion that the Iran deal was Obama's idea and that Iran gets $150 billion. This is totally incorrect. It's a deal from the 5 countries in the UN Security Council + Germany & the EU and Iran. This from the Huffington Post:-

"WASHINGTON -- Iran will receive approximately $55 billion in sanctions relief once the nuclear deal is implemented, said Treasury Secretary Jack Lew -- a fraction of the $150 billion that critics of the agreement have claimed will go to the country.

"There is a lot of discussion out there that Iran is going to somehow get $150 billion as soon as sanctions are lifted. That is incorrect," said Lew, speaking at a breakfast hosted by the Christian Science Monitor on Wednesday. He explained that Iran will not be able to access much of its money that has been locked up overseas due to sanctions because the money has already been committed elsewhere.

Last week, Lew told a group of senators that over $20 billion of Iran's frozen assets has already been committed to infrastructure projects with China, and that Iran owes an additional "tens of billions" of dollars on nonperforming loans to its energy and banking sectors.

On Wednesday, Lew estimated that Iran's demand for domestic investment surpasses $500 billion, and that it will cost between $100 billion and $200 billion to restore production levels in its oil and gas sector.

[Jan 29, 2016] Crude Combat Riyadh Reduced Oil Prices to Hurt Russia and Iran

sputniknews.com
By reducing oil prices, Saudi Arabia is waging a secret war against Russia and Iran, according to political analyst Bassam Tahhan.

In an interview with RT , political analyst Bassam Tahhan said that Saudi Arabia and the other countries of the Gulf Cooperation Council are trying to force down oil prices in order to harm Iran and a number of other oil-producing countries, including Russia.

"A secret war is being waged by Saudi Arabia and Gulf Cooperation Council states which are slashing oil prices so as to strangle Iran, Russia, Algeria and Venezuela, as well as the entire 'anti-American' axis created by these countries," Tahhan said.

He explained that all those countries had refused to adhere to Washington's demands with regard to Ukraine , Syria and Yemen .

According to Tahhan, the oil spat between Riyadh and Tehran is unlikely to lead to a war, given Iran's military potential and the sheer territory of the country.

What's more, he said, Saudi Arabia will fail to prod the UN or the West to issue a resolution to condemn Iran and authorize invasion of the country.

Rather, Saudi Arabia itself may be attacked by Iran's allies, such as Yemen, a scenario that Tahhan said may see Saudi oil fields destroyed and oil prices rise.

At the same time, he noted that the United States is unlikely to say "no" to the war between Saudi Arabia and Iran, because Washington could supply arms to both parties to the conflict.

Earlier this month, international business analyst Ralph Winnie told Sputnik that Saudi Arabia has dropped its oil prices to try and wreck the Iranian economy and keep Tehran's oil exports out of major European markets.

"The Saudis are looking to gain a competitive advantage: this is a response to the lifting of Western economic sanctions on Iran , which allow the Iranians to reenter the global energy marketplace," he said.

His remarks came after the Saudi oil giant Aramco announced that it would cut oil prices for Europe, apparently in preparation for Iran's resumption of oil exports to the region later this year.

He was echoed by Executive Intelligence Review senior editor Jeff Steinberg , who said in a separate interview with Sputnik that by slashing their oil prices, the Saudis were targeting US and Russian oil producers as well as the Iranian ones.

[Jan 25, 2016] How quickly can Iran get its oil groove back - Fuel for Thought by Margaret McQuaile

Notable quotes:
"... According to the IEA, 60% of Iran's initial 500,000 b/d of new exports could be made up of Iranian Heavy, 30% of Iranian Light and the remainder consisting of a new heavy grade called West of Karun, which is due to make its debut in the second quarter. ..."
"... Fesharaki says the volume of condensate is somewhere between 30 and 50 million barrels whereas the volume of crude stored afloat is between 10 and 15 million barrels. ..."
"... - Margaret McQuaile ..."
The Barrel Blog
The IEA also highlights the marketing challenge and expects Iran not only to be competitive in its pricing policy, but also to be open to crude-for-product swaps and deferred payment terms.

In the meantime, the IEA believes Iran has made considerable progress in readying its oil network and identifying prospective buyers and reckons an additional 300,000 b/d of crude could be flowing by the end of the March this year, although it does make the point that for now this volume is speculative.

It estimates that Iran increased production by 40,000 b/d between November and December to help fill storage tanks at the Kharg Island loading terminal in preparation for the lifting of sanctions and expects Iranian oil flows to rise towards pre-sanctions capacity of 3.6 million b/d within six months.

According to the IEA, 60% of Iran's initial 500,000 b/d of new exports could be made up of Iranian Heavy, 30% of Iranian Light and the remainder consisting of a new heavy grade called West of Karun, which is due to make its debut in the second quarter.

... ... ...

Fereidun Fesharaki, chairman of consultancy Facts Global Energy, expects a 300,000 b/d export boost by end-March and another 300,000 b/d by end-June. Early volumes will head largely to Asia, where mechanisms for taking Iranian crude are already in place, he says in a note, while operational and banking issues will delay the European ramp-up to the second quarter.

... ... ...

Fesharaki says the volume of condensate is somewhere between 30 and 50 million barrels whereas the volume of crude stored afloat is between 10 and 15 million barrels. The bulk of the floating condensate is likely to go to China, Japan and South Korea, he says.

Iran will need to free up its tanker fleet as soon as possible to deliver crude but selling these condensate barrels, given their "specialized nature," could prove to be tough, the agency says. So, until substantial volumes of this ultra-light oil can be sold, Iran will likely concentrate on selling crude from Kharg Island.

- Margaret McQuaile

[Jan 22, 2016] Iran with population over 80 millions might soon becaome a net importer

Notable quotes:
"... Besides having 2.5 times the population of Saudi, I am of the impression that they have a much more western style economy. That is, they probably have a decent manufacturing base in order to construct nuclear reactors, guided missiles, ships, most of their own military weapons, roads, cars, etc. and to support a decent sized army of their own. Are they heavy into wind, solar and battery power?? ..."
"... Clueless, if by the end of the year Iran is producing an extra nickel, it wont offset the decline in fields being erased off the map at $65 per barrel. ..."
"... Today we have this oil price conflict that is shaping the future of OPEC in 3-5 years. It is conflict for majority control of the cheapest exporting oil within the OPEC. ..."
"... Iran with its young and fast growing population faces internal consumption problem similar to what Malaysia have and might well stop to be the major oil exporter in a couple of decades. ..."
"... OPEC to a certain extent is gone after Saudis decision to lift quote regime. It remains some kind of umbrella organization, but it is no longer a cartel - they are unable to act as a single unit in their own economic interests. ..."
"... My impression is Saudis are dumping their oil on the market due to some non-economic considerations. Financially they are committing a suicide depleting their foreign reserves and winning very little (if at all) in terms of market share while their fields are aging fast. Essentially what they are doing is stealing oil from future generations making the mere existence of the country problematic in 50 years or so. The diversification of their economy is very difficult to implement. Politically they also alienated a lot of countries who might be able to help them. Especially during the rule of a 30 years old deputy crown prince Mohammad bin Salman ..."
peakoilbarrel.com

Clueless, 01/20/2016 at 11:20 am

If by the end of this year Iran is producing 500,000 bbl/day more oil, I am curious how much of that will be available for "net export?" By net, I mean using Jeffrey's methods. That is, I believe that a lot of Iran's current oil production is exported and then returned to them as refined product.

I would note that Iran's population is currently over 80 million people, about 10 million more than in 2005. I think that the least amount that anyone has for use internally by Saudi Arabia is 3 million bbls/day, and that is with a population of only 32 million. So, if Iran is going to invest the $100+ billion, which was just released to them, on infrastructure projects, I kind of have a gut feel that they might themselves use most of their own production. But, I am puzzled even by current figures. I do not understand how Iran can net export oil with current production of around 2.8 million bbl/day.

Besides having 2.5 times the population of Saudi, I am of the impression that they have a much more western style economy. That is, they probably have a decent manufacturing base in order to construct nuclear reactors, guided missiles, ships, most of their own military weapons, roads, cars, etc. and to support a decent sized army of their own. Are they heavy into wind, solar and battery power??

Fernando Leanme , 01/20/2016 at 11:54 am
Clueless, if by the end of the year Iran is producing an extra nickel, it won't offset the decline in fields being erased off the map at $65 per barrel.
Dennis Coyne , 01/20/2016 at 5:27 pm
Is a "nickel" aka 500 kb/d?
Fernando Leanme , 01/21/2016 at 6:44 am
Yep.
Ves , 01/20/2016 at 11:58 am
Clueless,

It is not about how much Iran can export now, but 3-5-7 years from now. Today we have this oil price conflict that is shaping the future of OPEC in 3-5 years. It is conflict for majority control of the cheapest exporting oil within the OPEC.

Which group of countries have the majority control of that oil will have a controlling oil policy within the OPEC and outside of OPEC.

likbez, 01/23/2016 at 12:01 am
Ves,

Iran with its young and fast growing population faces internal consumption problem similar to what Malaysia have and might well stop to be the major oil exporter in a couple of decades.

So your statement "It is not about how much Iran can export now, but 3-5-7 years from now" should by slightly amended by the fact of growing Iran internal consumption. Also it is unclear how much of their fields are depleted and how effective will be investment into their oil infrastructure. They will remain major gas producer, but whether they are capable to became again a major oil producer is much less clear.

Why do you think that this is "conflict for majority control of the cheapest exporting oil within the OPEC." OPEC to a certain extent is gone after Saudis decision to lift quote regime. It remains some kind of umbrella organization, but it is no longer a cartel - they are unable to act as a single unit in their own economic interests.

I think that this conflict is exaggerated by Western MSM, who literally push one country against the other trying to find and amplify any statements to this effect. The main claim of Iran to Saudis was "we want our OPEC quota back" to which Saudis responded by lifting the quota system effectively disbanding the OPEC. Now Iran leadership is making statements which essentially play into Saudis hands promising to flood the market with their oil (selling it for peanuts; not a very wise policy). In other words they act as allies (in self destruction).

My impression is Saudis are dumping their oil on the market due to some non-economic considerations. Financially they are committing a suicide depleting their foreign reserves and winning very little (if at all) in terms of market share while their fields are aging fast. Essentially what they are doing is stealing oil from future generations making the mere existence of the country problematic in 50 years or so. The diversification of their economy is very difficult to implement. Politically they also alienated a lot of countries who might be able to help them. Especially during the rule of a 30 years old deputy crown prince Mohammad bin Salman

Iran is quite a different story. They probably will continue to exist even if they stop to be an oil exporter and became an oil importer. So for them becoming a major oil exporter again is not a survival issue. It would be nice, yes, and will increase standard of living in the country.

[Jan 18, 2016] Iran production and inventories by James_Hamilton

Looks like existing Iran stored liquids is mostly condensate and diesel fuel. also increasing og production in current circumstances is difficult and counterproductive. Looks like Iran choose the path of processing its oil and shipping processed products instead.
Notable quotes:
"... Iran intends to increase oil exports by 500,000 b/d right away, in addition to the 30 million barrels Iran has stored in oil tankers in the Persian Gulf. ..."
"... Iranian sources claim that their floating storage consists of fuel oil and condensate, but I guess we will find out: http://www.reuters.com/article/iran-oil-idUSL3N1021Z120150723 ..."
econbrowser.com

And next up will be Iran, whose production has been depressed as a result of international sanctions that are now being lifted.

Iran intends to increase oil exports by 500,000 b/d right away, in addition to the 30 million barrels Iran has stored in oil tankers in the Persian Gulf.

Monthly Iran field production of crude oil, thousands of barrels per day, Jan 1973 to Sept 2015.  Data source: EIA Monthly Energy Review.

Monthly Iran field production of crude oil, thousands of barrels per day, Jan 1973 to Sept 2015. Data source: EIA Monthly Energy Review .

Jeffrey J. Brown January 17, 2016 at 2:14 pm

Iranian sources claim that their floating storage consists of fuel oil and condensate, but I guess we will find out: http://www.reuters.com/article/iran-oil-idUSL3N1021Z120150723

[Jan 18, 2016] Iran to boost oil output by 500,000 barrels a day

Jan 18, 2016 | RT Business

"Iran is able to increase its oil production by 500,000 barrels a day after the lifting of sanctions, and the order to increase production was issued today," said Deputy Oil Minister Rokneddin Javadi, who also heads the National Iranian Oil Company.

Oil prices fell below $28 a barrel on Monday as the market braced for additional Iranian exports. Prices recovered during the day with Brent crude trading at over $29 by 2.00pm GMT.

Iran hopes to raise oil exports by around one million barrels per day within a year.

[Jan 18, 2016] Does anybody here believe that Iran can just open a few taps and instantly produce 500,000 additional bpd

Notable quotes:
"... Or are they just going to shift existing exports to another part of the world? Or is the whole thing just talk? ..."
peakoilbarrel.com

Frugal , 01/17/2016 at 1:52 pm

Oil price woes deepen as Iran vows to add 500,000 barrels a day

Does anybody here believe that Iran can just open a few taps and instantly produce 500,000 additional barrels/day?

Or are they just going to shift existing exports to another part of the world? Or is the whole thing just talk?

[Jan 18, 2016] Iran to Maintain Max Production at Joint Fields

Notable quotes:
"... Iran will continue the policy of maximum production from the joint oil and gas fields and that it has plans to enhance recovery from the fields in the post-sanctions era ..."
"... Our next priority is oil production from West Karoun fields so that in the next eight months, production will touch 200,000 barrels a day and will increase to 700,000 barrels by the end of the Sixth Five-Year Development Plan ..."
"... We also hope to increase production of condensates in South Pars field to one million barrels a day by the end of current governments term ..."
"... in less than 20 years, the value of petrochem products multiplied from one billion dollars to 18 billion dollars. ..."
"... In the field of refineries, it is decided that the capacity will be boosted from the current 1.7 million barrels a day to 3 million barrels, Zangeneh added. He anticipated that with continuation of support programs for the production chain, petrochemical production can hit 70 billion dollars a year. (Source: Safana) ..."
www.shana.ir
TEHRAN, Jan. 18 (Shana) – Minister of Petroleum Bijan Zangeneh said that Iran will continue the policy of maximum production from the joint oil and gas fields and that it has plans to enhance recovery from the fields in the post-sanctions era.

"Even during sanctions period (forced reduction in production), we had laid the principle that the reduction shall not include the joint fields," he said in a televised interview with the national Channel One news bulletin.

"During these years which we launched five South Pars phases, it meant an increased production of 150 million cubic meters of gas and 200,000 barrels of gas condensates from the joint field," Zangeneh added. "Our next priority is oil production from West Karoun fields so that in the next eight months, production will touch 200,000 barrels a day and will increase to 700,000 barrels by the end of the Sixth Five-Year Development Plan."

"We also hope to increase production of condensates in South Pars field to one million barrels a day by the end of current government's term," the minister said. Zangeneh stressed development of petrochemical industry among the downstream projects and said that in less than 20 years, the value of petrochem products multiplied from one billion dollars to 18 billion dollars.

"In few years, it will catch up to 26 billion dollars and by the end Fifth Development Plan it will hit above 40 billion dollars," he said.

"In the field of refineries, it is decided that the capacity will be boosted from the current 1.7 million barrels a day to 3 million barrels," Zangeneh added. He anticipated that with continuation of support programs for the production chain, petrochemical production can hit 70 billion dollars a year." (Source: Safana)

[Jan 18, 2016] Iran Increases Oil Export on Sanctions Removal Day President Rouhani

Notable quotes:
"... Some outcomes of the removal of sanctions are immediate. For example, we increased export of crude oil as of today and also some 1,000 LCs were opened just today by the banks which used to be under sanctions, he told a press conference after announcement of the sanctions withdrawal earlier in the day. ..."
"... Iran had announced that it is set to increase oil exports as soon as sanctions are removed for 500,000 barrels a days and that it will further add it to another 500,000 barrels in a short span of time. ..."
www.shana.ir
TEHRAN, Jan. 17 (Shana) – President Hassan Rouhani said on Sunday that Iran has started increasing its export of crude oil on the Implementation Day of the nuclear Joint Comprehensive Plan of Action (JCPOA).
"Some outcomes of the removal of sanctions are immediate. For example, we increased export of crude oil as of today and also some 1,000 LCs were opened just today by the banks which used to be under sanctions," he told a press conference after announcement of the sanctions withdrawal earlier in the day.

Iran had announced that it is set to increase oil exports as soon as sanctions are removed for 500,000 barrels a days and that it will further add it to another 500,000 barrels in a short span of time.

President Rouhani also said Iran will continue following the policy of resistive economy in the post-sanctions era.

The next year's draft budget bill which was submitted to the Parliament on Sunday has the least dependency on crude oil revenues, he added.

During the question-answer session with domestic and foreign media, Rouhani said Iran's private sector will be revitalized to employ the opportunities in the wake of removal of sanctions.

To a query on Iran's reaction to a possible change in the US policy in future by the hardliners regarding the nuclear deal with Iran, he underlined that Tehran will proportionately react to such likely breaches of the agreement.

"There is no ground for resumption of the UNSC sanctions… And the US government's commitments within JCPOA shall continue under UNSC Resolution 2231 regardless of the party taking power in its hands."

He added that Iran is ready for the investment and technology transfer by US companies in Iran noting that limitations in this regard lie on the other side.

"If Americans want to invest in Iran, there is no limitation here. Recently, they provided facilities for sale of commercial planes (to Iran) and removed barriers on export of some Iranian goods," he said.

Asked on future relations with China and Italy, President Rouhani said Iran will not forget the friendly countries that remained in trade contacts with the Islamic Republic and will increase its ties with them after sanctions removal.

He also criticized Saudi Arabia and certain Islamic countries in the region which negatively reacted to the withdrawal of sanctions in a fellow Islamic country.

[Jan 17, 2016] $200 bn in debt looms over American oil and gas

Notable quotes:
"... Tempted by big returns, shale companies have borrowed more than $200 billion in bonds and loans, from Wall Street and London, to cover development and projects that may not even come to fruition. Oil producers' debt since 2010 has increased more than 55 percent, and revenues have slowed, rising only 36 percent from September 2014, compared to 2010, according to the Wall Street Journal. ..."
"... On Sunday, the first shale company filed for bankruptcy. WBH Energy LP, a private Texas-based drilling group, filed for bankruptcy after saying that their lender was no longer willing to advance money. The company estimates their debt between $10-50 million. There are hundreds more in the US alone. ..."
"... Analysts believe North American shale needs to sell at $60-100 per barrel to break even on the billions of debt accrued by the energy companies. Indebted companies, fearing bankruptcy, may therefore be forced to keep selling oil, even at a loss. ..."
"... Energy companies that can afford it will cut production, but this will prove more difficult for smaller companies with larger debt hanging over their balance sheets. ..."
"... "It begins in one place like fracking in North Dakota or Texas, but it very quickly engulfs the rest of the world. In that way, its very similar to what happened in 2008… when billions of dollars were lent to people to buy homes they couldn't pay off," economist Richard Wolff told RT. ..."
"... The industry expanded rapidly, as the method proved capable of extracting oil and gas faster and easier than before, albeit with a certain environmental cost. Fracking can increase seismic activity, as well as penetrate water systems. Many states in the US have followed European nations in banning the oil extraction method. ..."
Jan 07, 2015 | www.rt.com
Plummeting Brent oil prices are putting pressure on North American shale, which has sunk hundreds of billions of dollars into investment, and could soon come crashing down.

Tempted by big returns, shale companies have borrowed more than $200 billion in bonds and loans, from Wall Street and London, to cover development and projects that may not even come to fruition. Oil producers' debt since 2010 has increased more than 55 percent, and revenues have slowed, rising only 36 percent from September 2014, compared to 2010, according to the Wall Street Journal.

Fracking, the process of hydraulic fracturing and horizontal drilling on land is much more expensive than the average water-based oilrig. However, over the past years, it has become relatively cheap and fast. Energy companies, eager to get in on the riches of the American oil boom, have been borrowing money faster than they have been earning it.

On Sunday, the first shale company filed for bankruptcy. WBH Energy LP, a private Texas-based drilling group, filed for bankruptcy after saying that their lender was no longer willing to advance money. The company estimates their debt between $10-50 million. There are hundreds more in the US alone.

Analysts believe North American shale needs to sell at $60-100 per barrel to break even on the billions of debt accrued by the energy companies. Indebted companies, fearing bankruptcy, may therefore be forced to keep selling oil, even at a loss.

One way to avoid going bust is to merge, which is what many companies already have on the negotiation bloc.

"We've already seen Baker Hughes and Halliburton agree to merger, and these were two titans that used to compete head to head," Ed Hirs, managing director independent oil and gas company Hillhouse Resources, told RT. "They've decided they can't survive separately, they need to combine," Hirs said.

The Texas-based driller believes that lower prices and major mergers will hinder progress in the industry.

"We will see a loss of tech. innovation and a loss of competition in the oil service business," Hirs said.

Energy companies that can afford it will cut production, but this will prove more difficult for smaller companies with larger debt hanging over their balance sheets.

Oil prices lost more than 50 percent in 2014, and have already dropped 10 percent in 2015. Futures dramatically dipped when the Organization of Petroleum Exporting Countries decided not to curb production at their November meeting.

Some experts believe the decision not to cut production, which would have alleviated oil prices, was a direct strategic move by the cartel to reduce the profitability of North American oil fields, from Alberta to Oklahoma. In the past five years, the US has moved from being one of the world's biggest oil customers to the largest producer, even overtaking Saudi Arabia.

Bubble burst?

This 'bubble' of debt could come crashing down on oil companies, as the housing bubble did on the sub-prime mortgage industry in 2008, which sparked a crisis in global financial markets.

"It begins in one place like fracking in North Dakota or Texas, but it very quickly engulfs the rest of the world. In that way, its very similar to what happened in 2008… when billions of dollars were lent to people to buy homes they couldn't pay off," economist Richard Wolff told RT.

The industry expanded rapidly, as the method proved capable of extracting oil and gas faster and easier than before, albeit with a certain environmental cost. Fracking can increase seismic activity, as well as penetrate water systems. Many states in the US have followed European nations in banning the oil extraction method.

[Jan 17, 2016] Oil and US share prices tumble over fears for global economy

www.theguardian.com
Sowatree -> Ibmekon, 2016-01-14 00:24:57
I did hear on the radio last week that there appears an economic war is being played out between Saudi Arabia and Iran. Truth of this I don't know.

But, what does concern the world at these prices are major trading companies may go bust. On derivatives and oil futures somewhere someone is carrying huge losses.

And, concerning the world economy derivatives are a markets of 70 or more trillions dollars , enormous markets, as Warren Buffet once said derivatives are financial weapons of mass destruction.

Somewhere in the world financial system huge losses on derivatives are sitting.

World Politicians shied away from the tough decisions under the guise of quantitative easing. QE appears to have caused greater missallocation of resources.

2008 financial crisis is reemerging from its dormant position. 2008 was just push further down the road.

Social Cohesion in Britain needs this time to really all be in this together.

Ibmekon -> Sowatree, 2016-01-14 09:01:38
" On derivatives and oil futures somewhere someone is carrying huge losses. "

The Big Lie - "zero sum game".
If that is true - play Monopoly in your own time with your own money.
That "zero sum game" pays billions in profits - so where does the money come from ?

"Financial institutions held OTC swaps with a notional value of $505 trillion at the end of 2014, "
http://www.bloomberg.com/news/articles/2015-08-06/europe-moves-to-reduce-risk-in-505-trillion-derivatives-market

Ibmekon -> Ruth Williams, 2016-01-13 21:42:54
Would love to know that myself.
This is a much too specific question for an economist - like asking for the winner of the 2-30 at Kempton.
Perspective is always a good thing -

Debt per Citizen £24,560
Interest per Year £39,648,610,427
UK Debt £ 1,590,708,970,219
Debt as % of GDP 80.81%
http://www.nationaldebtclocks.org/debtclock/unitedkingdom

BantosaurusRex , 2016-01-13 21:14:21
This is what happens when central banks across the world inflate the biggest bubbles the world has ever seen by keeping interest rates at near zero percent for 7 years. Let's make one thing clear - China is not the only culprit for the latest fears over the global economy, to say that many western economies such as the US or the UK have recovered or are on the road to recovery would be disingenuous to say the least.

We have been scraping along at the lowest rate of so-called "recovery" (debt-fueled with ZIRP) after a recession despite these interest rates - what would it have been like if rates were increased a couple of years ago? One can only guess, but it would be fair to estimate that we would be back in a recession.

So, here we are again, back at the latter stages of the next cycle in the boom-bust oscillations of our global economy - and "is this time different"? Yes, but only by the measure that this time there is little that central banks can do to mitigate or even slow the financial crisis. The 2008 crisis never really ended, this year we will undoubtedly see that the real part of that crisis is about to unfold - capitalism should be allowed to take place this time, and if that means huge corporations filing then so be it.

Ibmekon -> BantosaurusRex, 2016-01-13 21:24:02
"if that means huge corporations filing then so be it."

I agree - but they are Ok, in fact loaded with cash.

"May 8, 2015 At the end of last year, U.S. non-financial companies held a staggering $1.73 trillion in cash, up 4% from the $1.67 trillion on hand at the end of 2013, found Moody's."
http://www.forbes.com/forbes/welcome /

So much of the debt has been loaded on sovereigns - what will they do - file for bankruptcy ?

John Olesen , 2016-01-13 21:17:29
OPEC should not allow members to sell oil at a financial loss. Oil is trading below its intrinsic value and there are serious imbalances in the market. Member countries that sell oil below market value lose money in two ways. They add supply to a depressed market and they lose money on the transaction itself. It would make much more sense for OPEC to target minimum profitability as their primary goal for all members rather than trying to use their market position to eliminate producers in the United States.

Since most of the large energy companies in the United States are publicly traded, it would be better for OPEC members to use their profits to purchase equity in these companies rather than trying to make them unprofitable. I propose that OPEC target a specific and stable price long term and then to adjust that price for inflation. For instance, if it is determined that all members can profit at 70 dollar oil, then they should lower production when the price is below that and increase it when it is above that. Member countries then use a percentage of their profits to increase their reserves with share purchases of other non-opec producers, thus increasing reserves long term.

ID7586903 , 2016-01-13 21:33:29
Saudi Arabia has again badly miscalculated. By pumping vast amount of Oil, KSA thought it could sink America, Russia and Iran oil companies and Economies
Well it seems KSA is going broke! I am celebrating...
Ibmekon -> ID7586903, 2016-01-13 21:58:05
Make of this what you will. There is talk of Aramco being floated - biggest IPO ever.
http://www.wsj.com/articles/saudi-arabia-could-list-crude-reserves-in-aramco-ipo-1452509304

Current Saudi finance minster is Ibrahim Abdulaziz Al-Assaf

"After leaving academia, Ibrahim moved to Washington, DC where he represented Saudi Arabia at the International Monetary Fund (IMF) and the World Bank
...
In addition to being finance minister, Ibrahim is a member of the board of directors of Saudi Aramco (since 1996), the state-owned national oil company,
...
https://en.wikipedia.org/wiki/Ibrahim_Abdulaziz_Al-Assaf

makesnoadasense -> ID7586903, 2016-01-13 22:03:02
I wouldn't celebrate too soon, it would appear that there is a looming $200bn debt over American oil and gas...

https://www.rt.com/business/220619-shale-debt-us-companies /

coplani , 2016-01-13 22:25:44
Is this history repeating itself?...but in China.
1998 Russian financial crisis.....Their stock market collapsed followed by a run on the ruble which was devalued.
Most Russians suffered as their pensions, wages etc were severely devalued.
Same could be happening today in both China and Russia...

Financial war....Dinosaurs versus dinosaurs.
How to wreck a country....Trash it's markets and currency.
It's the law of the jungle.....The strongest survive.
However Russia and China will not take it lying down....Scary times indeed.

It seems that the Chinese market is under the greatest pressure...only to be propped up by the government pumping money into it. (printing money)...result will be their currency devalues and everybody in China suffers.

It has happened many times to many countries before...e.g. Germany, Argentina, Brazil, Russia etc....

Ciarán Here -> coplani , 2016-01-13 23:21:25
It's not Russian or China that is "printing" money have you not heard of quantitative easing in the USA $85billion dollars a month.
Penfisher , 2016-01-13 22:28:30
Two quick points.
First, OPEC has increased flow to destabilise Russian & Iranian profits. However, this situation demonstrates that the price of oil should never have been much higher.
Second, China has a better approach to wealth re-distribution than OPEC nations and all advanced economies. If a genuine desire to increase economic activity were expressed then wealth sitting in secret accounts and held by the top 10% would be taxed & spread to the true wheel of economy: ordinary people with poor purchasing power.
bonkthebonk , 2016-01-13 22:50:54
Finally time to unwind?

When the debt merchants, the money alchemists and voracious volatility vultures start panicking (Hey, it's all relative. Don't worry, THEY'LL be fine) and looking for 'safe havens' (anything deemed to have an intrinsic value, but still not gold as, 'we're not bloody savages, y'know...yet'), when prices, particularly the golden goose commodities that kept them in (debt fertilised) speculative clover in their (hopefully fitful) sleep, start to reflect genuine economic reality, then you know it's probably squeaky bum time for the hapless cannon fodder that didn't cause this train wreck, reaped little of its rewards, but nevertheless will bear the brunt of its consequences yet again.

ronnewmexico -> bonkthebonk , 2016-01-13 22:58:38
High rate temporary debt junk bonds are already failing. Those issued on the small oil drillers. But it is a relatively small part of the junk bond market itself nevertheless financial institutions overall.
Small companies are due to fail and will. the larger ones will pick up the pieces at rock bottom prices and things will go on.
ronnewmexico , 2016-01-13 22:55:07
The numbers anywhere in developed economies don't support recession. China by the worst guesses is still par on GDP. By most takes between 4 and 7 increasing GDP. With the looming effects of el nino on India I would not say it could enter a recession in the next 6 months but that would be a isolated event. The US no where close. People are taking the low oil prices as a read on the economy. It is not this time global consumption is going up not down. It is a supply glut.
SirWillis -> ronnewmexico , 2016-01-14 00:39:56
I live near KSA, and I see first-hand how corrupt and morally bankrupt the whole thing is. I also see how incredibly subsidised EVERYTHING is. The people of these countries are little more than spoiled children, with no incentive to work properly or even understand the businesses they are in. Russia has a much more diverse economy, in KSA it is almost entirely oil. The rest of it is industries that rely on oil money - such as the construction sector.

Offering an IPO on KSA's oil will expose the total incompetence and corruption behind the company, I don't know how they hope to hide it all. So, you're right, all is far from well. I will be packing my bags at the first sign of revolution, which I predict will be in 3-5 years. I don't think people yet realise how bad things are going to get once KSA implodes and Iran and ISIS seek to take advantage. It's going to be ugly, and I must admit, I'm a little scared.

PhilPharLap , 2016-01-13 23:21:51
the reason you have a collapsing global economy is because the idiots created one through a battery of Free Trade Agreements that were aimed at over -riding local sovereignty and democracy and accessing scab labour on an international scale

It didn't work did it - by dismantling local industry and exporting manufacture to countries like China the middle class in the West made itself redundant

Welcome to the great unwashed guys - you are one of us now and with less skills to survive - I don't think your economic and managerial skills will impress anyone

You did it all to yourselves ...Get in the queue for the welfare you denied others - and reflect:

"So the last shall be first, and the first last: for many be called, but few chosen."

Or alternatively put - "and wait your turn!"

ronnewmexico -> ronnewmexico , 2016-01-13 23:52:05
People are confusing the stock market with the economy. The economy is ho humming along. The market is artificially inflated in value by above stated factors. Not by a whole bunch but enough to make a sell off of minor sort a probable.
Earnings will once again be real and not a thing of less stock per earning share., Report
AshleyPomeroy -> ronnewmexico , 2016-01-13 23:59:03
I wish I could upvote this twice. It's not like e.g the dot.com crash, where a bunch of hopeless money-losing pipe dreams fell apart. Facebook, Apple et al actually make a profit and have a niche, it's just that with so many other investments offering desultory returns, the stock market has been pumped up by desperate speculators.
Blackbag1999 , 2016-01-14 00:21:18
I am not sure why people think the Saudis are in trouble.

Most of the shale is becoming uneconomical to recover if you believe the forward curve. $50 oil for 5+ years, they will need closer to $100 to go back to the capped wells. The frackers are just taking the first 30% of the cheapest oil to produce (1st 18 months), capping and moving on. They are churning through oil reserves at 3 times the rate to do it.

They can still do it until they get to debt repayment. Anyone thinking the industry got ultra efficient over night is optimistic feller.

The reality is shale gas is not the primary concern. They want rid of artic, deep water and tar sands. My guess is the Saudis would be more than happy to let the US be the swing producer as shale is far more flexible. Shale was the trigger not the problem.

mrfunbro , 2016-01-14 01:43:18
I'd be quite happy to see the whole stock market free fall. The current inequity and greed deserves it's reward. Money for nothing investors and free loader corporations that don't pay their share of taxation will be the ones who go down. A new system is required to break away from the old established power and energy companies that have led us to the brink of devastating our planet.
backatchya , 2016-01-14 02:00:21
The capitalists are the victims of themselves. Fortunately for them, they own the wealthiest states on the planet. And therefore, can always expect welfare, social assistance and
bail-outs whenever they burst another bubble. Socialism for the rich.

We are a stupid species to put up with this casino scam. If you disagree with the ponzy scheme, start by supporting Sanders in the U.S. and Corbyn in the U.K. At least it's a modest beginning to opposing these criminals.

If_Not_Why_Not , 2016-01-14 02:50:01
China stock piling oil is a good idea, may help explain recent capital outflows , of which the article does not explain the opaque /nebulous financial details of these movements. It maybe China shuffling pieces on a board.

"The country's global trade surplus widened by 21% to $60bn in December. Over the whole year it was $594bn. The country's trade surplus in December with the European Union, its biggest trading partner, increased 36.8% to $15.6bn. The surplus with the US contracted 6% to $19.4bn."

No doubt the figures need to treated like all PRC figures.
That said it is undeniable that China had another huge trade surplus.
Yet despite this they manage to cheat on their exchange rate and devalue the Yuan.
The Currency/Trade Wars are in full swing..

HollyOldDog -> litesp33d1 , 2016-01-14 14:32:01
By then then most of the oil residues, waste and plastic products will reside in the Worlds Seas and Oceans. I've not seen much movement to remove the plastic gyres floating around the Southern Pacific Ocean. Land waste management has serious flaws as well. The only 'waste management ' in the UK that is booming is all the junk that motorists chuck out of their cars when mobile - they must think that plastic bags hanging from tree branches 'adds' to natures wonders. In a resturant car park the other day were 2 used babies nappies left in a parking bay - some people are scum and these couldn't have been poor.
Peter Sembol , 2016-01-14 03:35:11
Incredible how low the West in cahoots with Saudi Arabia will stoop, and all in an attempt to crush Russia economically and politically. And the media continues the deceptive narrative about troubles everywhere, brought on by 'competition' among oil producers, except pointing to the true and only reason behind the low oil price. The public in general swallows the 'explanations' forgetting that the ball started rolling downhill immediately after the USA twisted Germany's and other western European countries to impose sanctions on Russia in retaliation for it's welcoming Crimea back to the Motherland. In the name of this geopolitical game, the good people of USA, Canada and other countries whose significant part of income derives from natural resources and related products, are loosing their jobs by the thousands. All is well and according to the plan, as long as Russia suffers more than the West, and will be the first to bite the dust. The world economy will then be turned around to everyone's relief.
MattSpanner , 2016-01-14 04:43:08
Seems the FED's recent interest rate rise was premature. If another 2008 does happen calls to abolish it will grow ever louder, especially since economic chaos will smooth Trump's path to the White House, and Trump has made FED abolition one of his campaign pledges. After repeated failures catastrophes under Greenspan, Bernanke and now Yellen it seems the FED is surplus to requirements., Report
NWObserver -> MattSpanner , 2016-01-14 05:35:59
What will they do after abolishing the Fed? Will they have a single national currency or allow each bank (or any other entity) to issue its own currency and let these different currencies compete with each other?

If they continue to have a single national currency, who will issue it and set the monetary policy? Another Central Bank or the government? If it is going to be another Central Bank what exactly is the point of abolishing the Fed? Why not change the law to allow the government to remove the Fed's board of governors and appoint those they think are more competent than Janet Yellen and other governors, since abolishing the Fed will anyway require the repeal of the law establishing it i.e. it too needs Congressional approval. If the government is going to be issuing the currency and set the monetary policy, in what way would it be superior to the Fed doing the same?

If they allow any entity to issue its own currency, what currency will the taxes be denominated in?

ronnewmexico -> MattSpanner , 2016-01-14 05:42:12
Well the predictions were for four rate hikes in the year. Now perhaps we see two. The one already and another. Things get better and it is up to four. The dow only dropped three hundred or so and the S and P is above its support level, which is about 1857 to my dim recollection.

So till we exceed that support to the downside, really things are not bad. A wash out was probably a necessary thing.

I think people are overdoing this thing. The media seems to be hyping the decline which may account for all the sell side prognostications.
Earning are just beginning. If I see indications that earming are the mover behind the sell off I would have concern. Alcoa all things considered was not that bad. Certainly not as bad as the tape today. OIl by my guess is the real mover as the new lows have people spooked.
I am not to worried it can flip up or down but it really is only a small part of the market nowadays not what it was in yesteryear.

So I repeat this is overdone, that is my opinion. Those calling gloom and doom on this action, no offense but this little resembles any major sell off of a lasting duration spiral down. What is the mover….low oil prices? The rest of the market benefits from low oil prices.

Sentiment can drive things lower but really only for so long. Chinas last numbers reported were better than expected. Me being cynical and seeing the talking heads talking things down anticipate it is the big money movers trying to create some action on the short side. How long they keep this up is a guess. But it requires someone to keep pressure on to move it down. Without new bad news on China, what is the precipitive factor….nothing new here.

ekaai Kaewaniti , 2016-01-14 05:52:46
Unfair market system, Complete waste of time, energy and resources. Destroy all the stock markets along with corporations and Banks. It is time we stop playing this ridiculous economic game and start concentrating on the real issues that we are facing. Poverty, Conflicts in the middle east, environmental degradation, climate change, and many more. What is the root cause of all of these problems? Yes it the socioeconomic system capitalism with its flawed monetary system owned by the corporations and the Banks that does not care about the well being of planet or nature and the well being of all human beings but only care about their own wealth, power, fame, egos. Such idiots!!!!! stop playing their game and move to a new fair game called RBE and other similar systems.
werdzwerth , 2016-01-14 07:17:28
It is very stupid of us to base our economy on something as unstable and selfish as the Stock Market, as well as something as unstable as governments, democratic and otherwise. It is about time we became as intelligent and clever as all these whizz kids who invent amazing technology and make amazing discoveries. It is about time we became whizz kids at organising an intelligent and reliable economy. For us.

Why do banks charge an interest on loans? If the function of money is to get the economy started and running, then the work done and the profits made should be a sufficient reward. Banks could actually give money away on a non-return basis, so long as the money goes to people who will spend it, this spending lending to more spending.

Perhaps the private owners of the current private currencies want more than a sound economy, perhaps they want power, and want to exercise this power just to know for real that they have it? Perhaps they are not fully-fledged human being animals but suffer some form of genetic or social affliction that makes them behave in dangerous anti-social ways? Perhaps they don´t give a fig about other human being animals - other than those who serve their biological wants and needs? Perhaps shareholders are afflicted in the same way?

Perhaps we could form our bank to issue our non-returnable money, and even decide what work is worthwhile and is done and what work is not worthwhile and so will not be done?

Millions of years ago, so we are told, some fish came out of the sea and survived. What I am suggesting is a work and economy evolution of a similar scale. Current economic theory has us all drowning in the quagmire of self-interest-driven chaos, self-styled as a "social science". Perhaps we could come out into fresh air and create a diversity of human activity on a par with the diversity of living things on land and in the air that came from those first brave fish that ventured beyond known limits?

Columbus did not go over the edge of the world but discovered a whole New World.

Perhaps we need to go beyond even the "thinking outside the box" box?

Thank you.

criminalswelcome , 2016-01-14 07:35:29
Who funds international terrorism try the oil rich countries in the Middle East so let's assume the Yanks have got smart for once and are flooding oil market to bring down these economys .
The end game is destabilise them then pick up their oil industries for a song and influence just who makes Middle Eastern policys by economic means .
Bit of a dream but hey nothing falls down in price to this extent without a hidden reason given its a fossil fuel that should be rising to maintain supplies for the long term .
litesp33d1 , 2016-01-14 08:09:40
The economy is like a super tanker and these results are still the effect of the ripples of the economic crash almost a decade ago. The result of lower oil prices will be that ordinary people will start to realise they have more disposable income than they did a year ago and start spending that money on more shit they don't need and the economy will swing back with a vengeance.
paddyryan , 2016-01-14 08:24:08
Well surely all those neoliberal economists can't be wrong....it must be the fault of that evil Mr corbyn and his army of trotskyists.....HA HA we are on the slippery slide to another global crash folks ...
SeeNOevilHearNOevil , 2016-01-14 08:45:19
Sigh....the stock market....virtual money and speculation...Worst thing ever created causing insane chain effects in economies. Although....why were economies booming before when Oil price was low? Cause sure oil companies profits go down, but every other business that uses the oil increases their profit. Isn't this also a good reason to start doing something about being so oil dependant?
humbleandpoor , 2016-01-14 09:50:16
Once in a lifetime chance for the USA to escape from the strangle whole of the Saudi oil grip.
Fracking gives them a chance to break with the Saudi s or even break them for good.
Failure doesn't t bear thinking about, and we all know where Obama s sympathies lie - but in modern America who cares.. the battle is between the giant bureaucracies, not the democratic froth on top of the cake.
Always remember America in you hour of destiny there were Americans long before there was the USA . And will be long after it is gone. And for the love of God .. COLUMBUS did not discover America. Which ironically is named after a Welch sheep farmer.?
Americo FrontHoovesintheWellies was his full name. Knew a thing or two about sex and sheep., Report
Eugenios -> humbleandpoor , 2016-01-14 15:28:25
Most US oil comes from Canada and Mexico, a very small percentage from Saudi Arabia. But they have enormous financial influence through bonds, obviously, and buying media and politicians. Also Israel and Saudi Arabia have been working together under the table for some time, as was obvious during the Gulf War, and now in their efforts to begin a war against Iran. Fracking has never been any threat to the Saudis--the cost is too high. Their present lowering of oil prices is directed against Russia, surely in cahoots with the US.
HeadInSand2013 , 2016-01-14 17:54:25

Oil and US share prices tumble over fears for global economy.

The economists have been telling us that there is little danger for the US economy to be pushed into recession by a slow-down in the Chinese economy - referred to here as "global economy". More importantly, in election years the US Markets have never been good indicators of the US economy, anyway.

The real reasons for the US market plunge are the trades conducted on behalf of the Wall Street tycoons and the Saudi Royal Family. Both are doing their best to push the markets down, because they are deeply worried of having another Democrat in the White House, come January 2017.

The Wall Street tycoons are apprehensive about getting dragged into courts for their financial mischiefs during the last decade. The Saudis are concerned that the US leaning further toward Iran, which will encourage their internal oppositions to demand reforms, which could include getting rid of the Royal Family. So, both the Saudis and the Wall Street tycoons have a common cause. They will "keep at it", until they can be sure that the next US president will be a Republican.

Eugenios , 2016-01-14 18:45:56
"National debts, i.e., the alienation of the state – whether despotic, constitutional or republican – marked with its stamp the capitalistic era. The only part of the so-called national wealth that actually enters into the collective possessions of modern peoples is their national debt. Hence, as a necessary consequence, the modern doctrine that a nation becomes the richer the more deeply it is in debt. Public credit becomes the credo of capital. And with the rise of national debt-making, want of faith in the national debt takes the place of the blasphemy against the Holy Ghost, which may not be forgiven.

The public debt becomes one of the most powerful levers of primitive accumulation. As with the stroke of an enchanter's wand, it endows barren money with the power of breeding and thus turns it into capital, without the necessity of its exposing itself to the troubles and risks inseparable from its employment in industry or even in usury. The state creditors actually give nothing away, for the sum lent is transformed into public bonds, easily negotiable, which go on functioning in their hands just as so much hard cash would. But further, apart from the class of lazy annuitants thus created, and from the improvised wealth of the financiers, middlemen between the government and the nation – as also apart from the tax-farmers, merchants, private manufacturers, to whom a good part of every national loan renders the service of a capital fallen from heaven – the national debt has given rise to joint-stock companies, to dealings in negotiable effects of all kinds, and to agiotage, in a word to stock-exchange gambling and the modern bankocracy."

Karl Marx

[Jan 17, 2016] Oil price woes deepen as Iran vows to add 500,000 barrels a day

Notable quotes:
"... America threatened Russia some time ago about meddling in the affairs of Syria ..."
"... The US is really going for broke on crashing the oil price ..."
"... All of this to try to contain Russias military rearmament made possible by sky high oil prices ..."
"... Has the west finally gotten wise to the Saudi money that flows into extremist groups? Would seem so. West seems to be doing everything it can to contain the Saudis. eems to be doing everything it can to contain the Saudis. ..."
"... Yes because of millions of refuges that Arab countries caused by supporting ISIS it is completely natural for west to go after Saudi Arabia and its allies sponsor of ISIS. So they got what they deserved. Today I also read that the markets in Saudi Arabia, Qatar and Emirates collapsed and I think this a beginning of an end for them. ..."
"... The Iranians deciding that their revolution has matured sufficiently for them to plainly state we dont wish death on anybody, our religion is about peace, and to demonstrate our sincerity well urge our people to stop such rhetoric would contribute to Irans rehabilitation as a more or less normal member of the global community of nations. ..."
"... This has to be the beginning of the end for the Saudis and Qataris and their utter crapulence, all at the expense of the rest of the World. OPEC has no answer for this and is completely impotent to do anything about it. The cartel is busted. ..."
"... And so it seems with oil. There has to be a base production cost which doesnt vary and I doubt that the Saudis or Iranians are selling it at under that cost - they both need a modest profit - so, one wonders, if they can make that modest profit at $30 a barrel, think how much they were making at $100 ..."
"... The U.S and Iranians are using each other against their own allies. U.S is using Iran to put pressure on Saudi so that they keep producing more oil to bankrupt Russia, despite it destroying Saudi economy. Iran is using USA as a counterbalance to Russia because as much as they want Russias help, they dont want Russia to become too strong in the region. ..."
"... In my view Iran was never quite the bad guy that the western governments portrayed it to be. We certainly have differences. But if you compare Iran and Saudi Arabia there is no contest - Iran is far less a bogeyman. ..."
www.theguardian.com

The Guardian

Sean Mcmahon , 2016-01-17 19:10:22
The funny thing is that the sanctions have probably helped Iran as it had to survive with less. Iran now gets access to it's foreign banking about 50billion net and can start exporting again.

Saudi is burning through its reserve cash and it's populace are used to getting things for free, will they survive low oil revenues like Iran or is the House of Said on the brink of annihilation? Talk about shooting yourself in the foot!

It's amazing how detrimental oil has been to the middle east. If only they could have gone down a similar path to Norway....

Jahanzeb Ahsan , 2016-01-17 18:56:59
Seeing Iran to go into economical slow down was a depressing sight. OPEC definitely took a huge share of IRAN'S oil fortune and that time can not come back. PART of it was Iran's fault agreed, but since Iran's sanctions are lifted you cant blame it.

It's just taking a share of what it has lost in years. This will indeed afftect gulf region and other oil exporting countries but HEY BACK TO REALITY!!! Indeed its bad time since oil is already record low thanks to Fracking. This time is like dubstep for environmentalists who are dancing on oil price beats. No one is actually explaining the actual picture behind the scene as hundred of thousands of jobs are being slashed. Its like a death sentence for oil workers like me. 1 year since graduation as a petroleum engineer still no job worried to pay debts and there are countles like me. In short low oil prices won't make things better but worse.

Xavier Cournet , 2016-01-17 16:21:17
"The French-listed aircraft maker Airbus also looks set for a significant boost from the sanctions ending"
It is the first time, a British newspaper says "French aircraft maker Airbus". Yes Airbus is principaly a French company and not a European one contrary to what British newspaper often say.
ID241823 -> lifeintheusa , 2016-01-17 17:24:40
Indeed...the magic answer is interesting to say the least. America threatened Russia some time ago about meddling in the affairs of Syria and other cooperative business tactics. This manipulation is more about the benefits beneath mainstream media...plus, it is an election year...of course, oil is welcome and plentiful...somehow...it always is election time...though the added incentive does make Russia cringe a bit...these United States knew the only way to allow Russia to feel pinched was this way...so her and her cohorts have combined efforts to achieve their goals. Hmmm...
MerlinUK , 2016-01-17 14:41:56
Hammond is such a prostitute with his comments. They have been sucking up to Saudi/Qatar and UAE for decades, but now they are all on the slippery slope, he says 'dump them all and start courting Iran'. The man has no shame whatsoever.
opyniated -> MerlinUK , 2016-01-17 15:15:12

dump them all and start courting Iran

Best thing he has said in his career. Dump the wahhabi sheikhs while your heads are still standing on your shoulders.

sokolnik100 , 2016-01-17 14:28:57
The US is really going for broke on crashing the oil price:-
1 Deal with Iran (to increase supply)
2 Saudis pumping as much as they can (favour to US who turn a blind eye or help their regional aspirations by financing ISIS and AQ)(note the price was going nowhere until Ukraine/Crimea appeared then suddenly it started going down whilst Saudi currency actually appreciated)
3 Letting the US export oil (more supply)
4 Letting Turkey take oil from ISIS (more supply)

All of this to try to contain Russia's military rearmament made possible by sky high oil prices.

DDDFFF -> sokolnik100, 2016-01-17 14:38:39
that's correct as well as containing the Saudi, Qatari sponsored terrorist groups
ElfenLied2 -> DDDFFF, 2016-01-17 14:50:05
I thought that the Saudis see the terrorism as their own failure as well?

It's not controversial that it is oil money that has caused the situation, but the Saudis seem as powerless as anyone else to stop it.

Glenn Middleton -> sokolnik100 , 2016-01-17 14:50:16
Remind us why so many shale producers in america are going bust because of oil prices.
DDFFF , 2016-01-17 14:19:04
May the terrorist funding by Saudi and Qatar comes to halt by cheap oil prices. They had made the decision to make it cheap but it is not Iran's decision to make it expensive again. Which believe me Iran doesn't like to do so especially that through the sanction years Saudis, Qatar, Emirates played a nasty role in OPEC by getting rid of production sluts(it was to do by limiting each member to a certain production level but as Iran was sanctioned they thought it is the best way to hurt Iran's share of OPEC by getting rid of it) now this is the only reason they cannot increase the oil price as well as they cannot control Iran's production . Iran will produce even more and has a fresh supply of Cash and its economy is more robust to be only based on Oil so what I want to tell the Saudis, Qatari, Emirates and their allies is to fuck off . Because through these years you were sponsors of ISIS, Cause hundreds of thousands of death tolls and millions of refuges in the world that you have not taken a single refugee and the whole EU and North Americas must pay for it now. YOU GOT WHAT YOU DESERVED ARABS. Hope Iran become friend with Israel too and teach Arabs another lesson.
MerlinUK -> DDDFFF , 2016-01-17 14:39:49
Recent events with Saudi princes assaulting maids in the US (then claiming 'diplomatic immunity' and skipping the country before charges could be laid against them) could also be a factor, as it has woken people up as to what the Saudis are really like.

The highway between Bahrain and Saudi/UAE is like the M25 at weekends, with Wahhabi hypocrites rushing to Bahrain to get pissed and laid. It's been like that for decades. They claim to be pious and expect their subjects, contractors and ex-pats working out there to do as they say, not as they do.

Tresidentevil , 2016-01-17 14:18:48
Saudi Arabia is therefore finished as a regional power. Economy crippled by low oil prices. Iran meanwhile has had to endure an embargo for a decade, resulting in a tougher economy that is far more diverse.

Has the west finally gotten wise to the Saudi money that flows into extremist groups? Would seem so. West seems to be doing everything it can to contain the Saudi's. eems to be doing everything it can to contain the Saudi's.

DDDFFF -> Tresidentevil, 2016-01-17 14:26:32
Yes because of millions of refuges that Arab countries caused by supporting ISIS it is completely natural for west to go after Saudi Arabia and its allies sponsor of ISIS. So they got what they deserved. Today I also read that the markets in Saudi Arabia, Qatar and Emirates collapsed and I think this a beginning of an end for them.
MerlinUK -> Tresidentevil, 2016-01-17 14:35:26
It really brings David Cameron and the Tories' sucking up to the Saudis into clear perspective, doesn't it, as their credit rating for buying arms will be taking a nosedive. Watch BAE Systems shares start to wobble this coming week.

It also leaves the Royal family in somewhat of a quandry, as who is Price Charles going to sword dance with now?

FunctionalAtheist , 2016-01-17 14:02:50
Iran adding to the current supply glut in oil was an inevitable consequence of the deal. Still, the timing is particularly bad, with the crash in commodities feeding a gloomy mood in stock markets around the world.

A deflationary spiral for the global economy is now a little more likely, with excess capacity in a range of manufactured goods, from steel to I-Phones, in addition to the glut in oil and other commodities.

But, that glut is not Iran's fault. The prisoner exchange was good to see.

Next I'd like to see a symbolic move by Iran: move on from the "Death to America" (and Britain, and Israel) rhetoric. Islam needs some public relations help. The Iranians deciding that their revolution has "matured" sufficiently for them to plainly state "we don't wish death on anybody, our religion is about peace, and to demonstrate our sincerity we'll urge our people to stop such rhetoric" would contribute to Iran's rehabilitation as a more or less "normal" member of the global community of nations.

MerlinUK , 2016-01-17 13:53:33
This has to be the beginning of the end for the Saudis and Qataris and their utter crapulence, all at the expense of the rest of the World. OPEC has no answer for this and is completely impotent to do anything about it. The cartel is busted.

I guess that nobody likes the Wahhabi hypocrites any more.

StuartHX , 2016-01-17 13:39:21
I suppose it all depends on how much Iranian oil is pumped into the system as a proportion of the total, but then what is the 'right' price for oil anyway?

It reminds me of a supermarket conundrum - 'What's the price of a packet of Pringles?'. This comes from the notion that in one supermarket they're £1 each or two for £1.50, in another they're £1.25 but one a 'buy one get one free' deal, in another they're £1 each but buy two and get one free... and so on. But not only this - all of these deals change weekly.

So you begin to wonder, given that a packet of Pringles costs the same to make whatever price they're sold at - and the manufacturer wants to make a modest profit - why can you never determine the true price?

And so it seems with oil. There has to be a base production cost which doesn't vary and I doubt that the Saudis or Iranians are selling it at under that cost - they both need a modest profit - so, one wonders, if they can make that modest profit at $30 a barrel, think how much they were making at $100

copyniated , 2016-01-17 13:32:13
Apparently, according to reuters, Saudi Arabia paid Somalia a $50 million bribe to break diplomatic relations with Iran. Iranians, themselves, would have paid the Somalian government more to beak off diplomatic relations.

But hey, why complain? It's free! Cheers 'Salman the Barbarian'!

copyniated -> Katrin3, 2016-01-17 17:06:42
Saudi Arabia, Israel, Bahrain, Sudan, Somalia, United States, The Comoros and Djibouti all do not have diplomatic relations with Iran. UAE recalled its embassador in sympathy with Sheikh Salman the Barbarian. Iran needed UAE before as it was used as a port for importing into Iran(a sanction busting avenue) but since sanctions are lifted, middlemen are no longer required which means UAE will lose an annual income of $11 billion and Iran will gain. Very sad!

I hope that The Comoros and Djibouti will soon reestablish relations because it is hurting Iran's economy.

Vizier , 2016-01-17 12:57:10
'The UK has played a central role, and I hope British businesses seize the opportunities available to them through the phased lifting of sanctions on Iran. ' said Philip Hammond.

His department was instrumental in sanctions against Iran while other countries, particularly Germany and France, were lukewarm. Which countries will now benefit? Answers on a postcode, marked 'Clue', to Philip Hammond.

Phil_Paris , 2016-01-17 12:45:31
Iran is closer to a development [nations] like Turkey than to Saudi Arabia. Saudis have always been unable to do anything else than watch oil go out of pipelines into tankers, they have no agriculture, no industry.

Iranians want to industrialize like Turkey, but that doesn't mean democracy and personal freedom. Development gives more means of control and repression to autocrats too, like we have seen in Russia, Turkey, continental China. Not all countries are able to move to democracy like Taiwan and South Korea

TomBakerIsGod , 2016-01-17 12:23:25
It is hard to understand why the Guardian labels low oil as an actual woe for the World. It mainly hurts countries like Russia and Saudi Arabia, while in the West we all benefit from cheap fuel.
copyniated , 2016-01-17 12:18:08
Doubt it. The news was already in the market and has been for some time. No surprize.

Even if does go further south, it would be temporary and besides the wahhabi regimes of Arabia are the ones who will suffer the most. Either way, good news for Iran.

SchraderBrau -> copyniated, 2016-01-17 14:34:34
The U.S and Iranians are using each other against their own allies. U.S is using Iran to put pressure on Saudi so that they keep producing more oil to bankrupt Russia, despite it destroying Saudi 'economy'. Iran is using USA as a counterbalance to Russia because as much as they want Russia's help, they don't want Russia to become too strong in the region.

The (seemingly) more likely scenario is to make the excuse for war against Iran this year.... "We really tried with these guys but now we have to 'regime-change' them". That will result in a MASSIVE war.

A less likely scenario is that USA (at a shot to nothing) thinking they might actually replace saudi oil-fields propping up the $ with IRanian ones. And Iran (at a shot to nothing) thinking they might take the U.S out of Israel's pocket. As unlikely as either of these scenarios are, all bets are off this year. Both those latter plays could push Israel and Russia closer together, resulting in a MASSIVE war which the U.S would lose.

Either way, a MASSIVE war is coming and this development is more significant than people think.

Vizier -> MrPeevley, 2016-01-17 13:05:51
In my view Iran was never quite the bad guy that the western governments portrayed it to be. We certainly have differences. But if you compare Iran and Saudi Arabia there is no contest - Iran is far less a bogeyman.

It is always worth remembering that nearly all the September 11 hijackers were Saudis, none were Iranian. ISIS was funded and armed by Saudi Arabia, not by Iran. You can draw a direct line from Saudi Arabia through the carnage in Iraq and Syria directly to the terrorist attacks in Paris.

Whenever the west talks about 'Iran being a state sponsor of terrorism' they mean one thing and one thing only: Hezbollah.

Disclosure: I have a low opinion of Saudi Arabia so my comments are biased.

[Jan 16, 2016] Lifting of Iran sanctions is a good day for the world Discussion

Notable quotes:
"... Its great news for the people of Iran, business in Europe, not so great for Israel and my country, Canada. Oil is going to be $30 a barrel forever now. Our previous very stupid government put all our eggs in one basket, oil at $100 a barrel. ..."
"... Dear Moshe, You are not giving billions to Iran, It is Iranians money that was for frozen by US banks . ..."
"... Most of the middle eastern countries such as Iraq, Syria, Jordan, Saudi Arabia, UAE, Libya and lebanon are tribes with flags. The exception is Iran which has a long and establised sense of nationhood. It will never be a failed state. ..."
"... Iran is about to get their frozen assets back as part of the deal... lets hope they put that $100 billion to some good use... Welfare, housing, hospitals and education should all benefit... Unfortunately with so much trouble on their doorstep, theyll probably but new fighter planes and lots of guns from the new American buddies... ..."
"... Why do you think that US, UK, Israel, Saudi wants stability in Mid East region ? All evidence suggests otherwise from regime change in Syria to Libya .from emergence of Isis to Saudi demanding that US bombs Iran to state of oblivion. I am very happy about the agreement, however, i am very cynical about tricky Americans to uphold their part of bargain. ..."
"... If you dislike Iran maybe you must hate Saudi Arabia, a dubious country we gave been allies with for years. Personally, I find Iran to be far more reasonable than Saudi Arabia.. Perhaps you should open your eyes. ..."
"... They cant delay this. What they will do, is introduce different kinds of US only sanctions, for other reasons (to appease their AIPAC donors). ..."
"... In addition to that, i should say that there is a perception fueled by conservatives that all the bad stuff has been done by Iranians, but if I were an Iranian citizen, it would be pretty hard to forget that the US supported Saddam Hussein financially and militarily (with aid) during an eight-year, very bloody Iran-Iraq war that left hundreds of thousand Iranians dead or wounded (and, incidentally, thats when the US downed an Iranian airliner). ..."
"... Very true. How many Saudi terrorists are there, and how many Iranian ones? Islamic terror is exported is large quantities by our friends in Saudi-Arabia, just second to oil. ..."
"... Already Iran is looking at using barter with Europe exchanging oil for various goods. ..."
"... Anyway, not to engage in moral relativism but my country, the USA, has some human rights blemishes we need to recognize as well. Having President Obama say we tortured some folks doesnt help.. The dismissive tone is not conducive to addressing the situation. ..."
"... Germany had a great military, a modern industrialized society, and a history of invading other countries. Iran, not. ..."
"... Note to Republicans: Peacemaking is a good thing. Carpet bombing is a bad thing. ..."
"... Sounds like the Iranians are gradually emerging from xenophobic theocracy. ..."
"... Hopefully Iranians can build on this and continue to demand better relations with the west. Surly, they have had their differences with the west but they shouldnt let religious fundamentalists use Irans past history to create hate and pessimistic attitude towards west ..."
"... And would you also observe that most of these people would likely still be alive today if it werent for civilized Western nations bombing thier country, disbanding their army and institutions and throwing their country into chaos? ..."
"... But a country that goes to war for nothing more than greed sending hundreds of thousands to their deaths including their own sons and daughters ... would you visit there ... oops you live in the UK? ..."
"... There were no sanctions against Israel, which has nuclear weapons. Saudi Arabia is an Islamic fundamentalist state which sponsors terrorism. It is all hypocrisy. ..."
"... Vinculture: A disaster in the making thanks to 0bamas incompetence and naivety. A disaster for Israels aggressive foreign policy, maybe. And a disaster for the House of Saud. ..."
"... If the deal sticks on the US side, expect to see Iran make a number of subtle shifts in a pro-US direction over the next few years. It will be a reflection of the outcome of internal struggles within the Iranian clergy. The Supreme Leader gave Rouhani the chance to prove that negotiations and concessions could get acceptable results. The success of the negotiations will give Rouhanis faction greater clout for similar actions until such time as either they stuff it up good and proper, or somone crazy gets elected as US President. ..."
"... The USA has modified its attitude to Syria from Assad must go! to OK, he can hang around for a while , simply because Syria, with Russian, Iranian and Hezbollah assistance, is gaining the upper hand. Hence the willingness for the USA to negotiate. We rarely hear the words regime change in Syria from our politicians any more. So it is with Iran. Apart from Iranian involvement in Syria, Iran has managed to outlast the sanctions regimes and has had to ratchet up its own development of medicines, weaponry etc in anticipation of a possible Israeli or US attack. As a country of some 80 million people, they wouldnt be a pushover in the military sense. And at what cost? It doesnt bear thinking about. ..."
"... I dont believe for one second Iran will be able to bring that much oil online so quickly. The issues which have come about through years of barely no maintenance, cant just be reversed in a matter of months. Time will tell. But the mainstream media has been pushing this for a long time to further suppress oil prices. ..."
"... Meanwhile the US and Britain are directing and supplying the bombs killing innocent people in Yemen, none of which gets coverage in the press. It is a sad bad world we live in these days. Iran is probably less of a threat than Saudi Arabia which funds extremists who are so close to Isis and the likes yet do we care. It seems not. ..."
"... If only we had strong leadership like W Bush neh? Hed have strongly Decidered his way to victory just like the gleaming success next-door. Pass the bong. ..."
"... If we put aside sheer hypocrisy (always an important feature of foreign policy!) then I think the usual argument is that, unlike we rational Westerners, the Iranians are crazy religious maniacs who cant be trusted with a bomb. In reality, though obviously the Iranian regime is a religiously-based one, they have shown themselves to be quite pragmatic and cautious over the past 2 decades at least. Which isnt to say the regime is benign, by any means, just that their foreign policy is based on rational self-interest (or their perception thereof) - just like any other country. ..."
"... Another reason given is Irans supposed support for terror organisaitons. Putting aside the fact that defining what is a terror organisaiton is largely a matter of ones political views, its hard to see what this has to do with the nuclear issue specifically. Unless we buy the notion - straight from a 5th rate James Bond knock-off - that Iran could give its (non-existent) nukes to a terrorist, as though a nuclear bomb was equivalent to an AK-47. ..."
"... I dont back any country with Nukes, but I do back the balance off power, if Iran is overthrown with Syria, it would be dangerous times for the rest off us. It would be safer for Israel too disarm, followed by Pakistan, North Korea then East + West Bilaterally, simutaniously. ..."
"... Iran isnt Nazi Germany, if you want to pursue that analogy then its closer to Francos Spain and we got on well if occasionally frostily with them for 39 years without having a war with them ..."
"... After a progressive Persian govt renationalized and booted British Petroleum out of the country suffered a coup détat instigated with US aid in 1953. ..."
"... After the revolution we armed Saddam Hussein to start a war and killed millions of Iranians. ..."
"... If I were Iranian Id be double wary now of USs intentions. It seems that the working method of the West nowadays is to feign a warming of relations to draw yourself closer before a fatal stab. Remember Libya? And I recall Syria having a nice warm up period before the gates of hell opened. Take care, Iran. ..."
"... It looks to me that the west has to either start Armageddon to take Iran out or start to build bridges. ..."
"... Iran has always denied seeking an atomic weapon, saying its activities are only for peaceful purposes, such as power generation and medical research. The annual reports of the CIA/Mossad/German BND and the IAEA supported this fact consistently since 2004. It was only the despicable US/Israeli geopolitics enabled by their propaganda arm the mainstream media that maintained the charade of a clandestine nuclear weapon programme. ..."
"... there remains a lack of clarity with regards to the US. - as ever you never know what the US is going to do, and I suspect the US itself does not know given it dysfunctional political system. ..."
"... The far right in Israel, not for everyone. Saudi and far right wing Israel have a symbiotic relationship. Saudi can push its agenda of Wahhabism that secures its brutal regime and far right Israel profits from the bitter fruits of Saudi, as it means that Israel is seen as the anti-muslim anchor of the West in the region. Sadly, the political intervention of the US has been based around protecting and supporting this symbiotic relationship with money, troops and bombs. ..."
"... Obama has already issued an order(today) lifting sanctions on the sale of passenger airliners to Iran. Boeing Airbus are in intense competition as Iran plans to purchase 500 airliners in the next 10 years worth billions of dollars. ..."
"... given that the Iranian government is still highly suspicious of the Brits (for very good reason) I very much doubt theyll want to spend this much-needed cash on overpriced pads in Blighty. ..."
"... George W Bush said he got his orders from God, and they were amazingly similar to the ones he got from Big Oil. We know the results. ..."
"... It i amazing how western oriented news organization by default report the talking point of the western regimes reflexively. Unlike the news bureaus in the soviet era, they dont need minders and censors, those are just built in or plugged in by interviews. ..."
"... He can do what he likes, the US have given Israel a free pass, human rights abuses, extrajudicial killings, threats to Israeli Arabs, hidden nuclear weapons, all have to be ignored while their neighbours are subjected to endless scrutiny. While this continues the Middle East will never be at peace. Palestinians are humans too. ..."
"... Lifting of Iran sanctions is a good day for the world Yet these gangsters who control the finance industry(US/UK), and who can and do, impose sanctions at will, are free, without sanction, to wage war against whoever they so choose with impunity. Something is not quite right here, or are we too stupid, too compliant to see it? ..."
"... Ok - so you're anti nuclear weapons. Fair enough, you're free view. For me, much more importantly is the opportunity for trade. The Iranians are well educated and still have a historical connection with our country. ..."
"... The sanctions are another kind of war. The tradesmen will win at the end ..."
"... When sanctions started, they were nowhere near as harsh. European countries - as well as China and India - had long been growing tired of the extremely strict sanctions imposed mostly by the Americans. ..."
"... All the nuclear nations should have banded together with Iran to help Iran with their desire for peaceful nuclear power by helping Iran with expertise and funding to develop Thorium reactors. ..."
"... British foreign policy is a selective and hypocrital joke. ..."
"... Yes, unfortunately neither the UK or the US think long-term, when selling advanced weapons to the Saudis (or giving them to Israel). That may well come back to bite them, when the House of Saud falls, as it must. ..."
"... Amazed this has gone through. The worlds biggest and most dangerous children, Israel and Saudi Arabia, will NOT be pleased. These two are behind so much of the worlds problems, far moreso than their parent the USA. ..."
"... where are Israels nukes pointing, out of interest? ..."
"... Welcome to the world community Iran. Not a perfect nation but which is. No point demonizing people nations, it does more harm than good. ..."
"... Remind me, which country is currently levelling Yemen one building at a time? Oh yes, a Sunni nation Saudi Arabia. ..."
"... Anything that stops the Saudis playing the big I am is fine by me. Theyve already cut off their own nose over oil prices to stop US fracking and their economy is suffering, lets hope Iran can keep it low when it doesnt suit Saudi Arabia. ..."
"... Good, let the US who started all this nonsense feel themselves for a while what it is like to be outside trade with Iran. I bet it will not last long if companies realize they are still not allowed to do business because of their own extortion over the many years while the EU does commence trading. ..."
"... I really do hope you have an insurance policy Iran, I wouldnt trust these liars as far as .. and Id advise using some of whats rightly coming your way to insulate against future western blackmail. ..."
"... The US specializes in lack of clarity. Remember the two boats that Iran detained the other day? The US initially said that they had a mechanical failure and drifted into Iranian territorial waters. That version of events has become non-operative, and now the US is saying that the boats were fully operational, but one of the sailors accidentally punched the wrong GPS coordinates in. And then, of course, they failed to notice that they were getting awfully close to that island where Iran maintained a base. ..."
Jan 16, 2016 | The Guardian
chovil, 2016-01-16 16:33:47
It's great news for the people of Iran, business in Europe, not so great for Israel and my country, Canada. Oil is going to be $30 a barrel forever now. Our previous very stupid government put all our eggs in one basket, oil at $100 a barrel.

Israel was on the verge of nuking Iran. Ironically they stand to benefit from this, doing business with Iran. Reports from Iran were mostly that they were very western. They are Persian, not Arab, and if you look at historical maps, that line in the sand has existed for thousands of years. It's a good day. Iran is not North Korea, and it was the US supporting the Shah and his solid gold toilet that caused this problem in the first place. Back in 1978, it was obvious what was going to happen.

Afshin Peyman -> MicheNorman , 2016-01-16 16:33:47
Dear Moshe, You are not giving billions to Iran, It is Iranians money that was for frozen by US banks . Your religion says, Thy shall not lie and I believe it is in ten commandment, so why are you doing it ?
fatcontrol -> Themediaspoonfedlad, 2016-01-16 16:33:47
Most of the middle eastern countries such as Iraq, Syria, Jordan, Saudi Arabia, UAE, Libya and lebanon are tribes with flags. The exception is Iran which has a long and establised sense of nationhood. It will never be a failed state.

LiviaDrusilla -> okonomiyaki, 2016-01-16 16:33:47

A fatwa cannot be 'lifted' because it is the personal opinion of a cleric, and the cleric involved - Ayatollah Khomeini - has been dead for 25 years. However, 17 years ago the Iranian government said it was no longer pursuing the fatwa and would not reward anyone for killing Rushdie. Which kind of amounts to the same thing.
optimist99 -> Mervyn Sullivan, 2016-01-16 14:50:59
"There is no doubt that if today's weak western leaders had been the ones having to deal with Hitler, in place of Winston Churchill, the Third Reich would be ruling the world today."

For heaven's sake.... If the UK had remained neutral - how would that have prevented the Red Army from defeating the Nazis? It would have made the process slightly slower - that's all

Stalin had started to turn the tide against the Nazis even before the US was involved in WW2 (Battle for Moscow) - and the Brits did little up to then to help
him. The US did in fact help Stalin before it entered the war - by helping with war materiel (Lend Lease included the Russians).

The Brits helped too, with the Murmansk convoys - but these only began in August 1941. British strategic bombing of Germany had also hardy started by then.
No wonder Stalin pressed for "a second front now"...

With a neutral Britain, the Russians would have got to Cuxhaven and Bremen. As it was, the Russians got to Wismar (and only stopped due to British artillery being in position to oppose them - Rossokovski's orders were to advance to Lübeck..).

Patrick Ryan, 2016-01-16 14:49:19
Well when it comes to the Iran v Saudi battle of religious fascist dogma then I'm leaning towards Iran as the lesser of the evils... Iran is about to get their frozen assets back as part of the deal... let's hope they put that $100 billion to some good use... Welfare, housing, hospitals and education should all benefit... Unfortunately with so much trouble on their doorstep, they'll probably but new fighter planes and lots of guns from the new American buddies...
LiviaDrusilla, 2016-01-16 14:37:08
Former British ambassador to Tehran on Sky News. Amazingly enough, he's talking a lot of sense.
Afshin Peyman -> mattijoon, 2016-01-16 14:36:42
Why do you think that US, UK, Israel, Saudi wants stability in Mid East region ? All evidence suggests otherwise from regime change in Syria to Libya .from emergence of Isis to Saudi demanding that US bombs Iran to state of oblivion. I am very happy about the agreement, however, i am very cynical about tricky Americans to uphold their part of bargain.

Hope for the best but i see Saudi and Israeli are heavily engaged in sabotaging the agreement.

Pete Salmond -> AntonDeque, 2016-01-16 14:35:27
If you dislike Iran maybe you must hate Saudi Arabia, a dubious country we gave been allies with for years. Personally, I find Iran to be far more reasonable than Saudi Arabia.. Perhaps you should open your eyes.
SundarIsaacs, 2016-01-16 14:34:21
Cuba & Iran. Next Russia please. And then if possible impose sanctions on Israel, Turkey and KSA.
pretzelattack -> AntonDeque, 2016-01-16 14:32:51
i saw female protestors get beaten at occupy. i see fleeing unarmed guys shot by cops. maybe the west isn't too pure either? in any case, going to war over faked wmds doesn't work out well.
Katrin3 -> Iconoclastick, 2016-01-16 14:28:05
They can't delay this. What they will do, is introduce different kinds of US only sanctions, for other reasons (to appease their AIPAC donors). The terms of the nuclear deal are such, that they can't punish other countries for trading with Iran, when the UN and EU lift their sanctions, probably later today.

Iran can simply refrain from doing any business with the US.

LiviaDrusilla -> copyniated, 2016-01-16 14:26:50
Yes. It was on BBC. Apparently Kerry and Zarif had been locked in a room together - presumably discussing this.

BTW Yankee propagandist on BBC right now, getting the soft soap treatment as always.

Giulio Ongaro -> Phil Atkinson, 2016-01-16 14:21:43
In addition to that, i should say that there is a perception fueled by conservatives that all the bad stuff has been done by Iranians, but if I were an Iranian citizen, it would be pretty hard to forget that the US supported Saddam Hussein financially and militarily (with aid) during an eight-year, very bloody Iran-Iraq war that left hundreds of thousand Iranians dead or wounded (and, incidentally, that's when the US downed an Iranian airliner).

And the years of useless sanctions that only alienated Iranians. Let's not forget that the Soviet Union, for example, did not fall at the peak of the Cold War. It fell when the contacts with the West increased. It won't be that we open the contacts today and tomorrow Iran is a nice Western democracy, but judging from the splendid success of the 50+ years of US embargo of Cuba, I would rather engage Iran than isolate it.

robinaldlowrise, 2016-01-16 14:20:18

"It proved that we can solve important problems through diplomacy, not threats and pressure, and thus today is definitely an important day," [Zarif] said.

Is this guy Zarif in receipt of a backhander from Seamus Milne?

mattijoon -> moreblingplease, 2016-01-16 14:19:23
Very true. How many Saudi terrorists are there, and how many Iranian ones? Islamic terror is exported is large quantities by our "friends" in Saudi-Arabia, just second to oil.
Katrin3 -> dothemaths, 2016-01-16 14:19:17
No it won't. When Iran comes in from the cold, even the conservatives won't want to go back there. They also want a prosperous future for their people.
LiviaDrusilla, 2016-01-16 14:18:32
BBC reporting that there has been a delay in the announcement of the end of the sanctions - apparently they were expecting a statement 4 hours ago. However, it's just been announced that 4 American-Iranian prisoners held in Iran are to be released. Hopefully, that has resolved the 'hitch' that has been holding up the announcement.
Stephen_Sean, 2016-01-16 14:18:17
Unfortunately for Iran she is getting her freedom to sell oil on the open markets right at a time when the oil market is in complete free fall. Already Iran is looking at using barter with Europe exchanging oil for various goods.
mattijoon -> Papaplone, 2016-01-16 14:17:10

There will never be true freedom and prosperity for Iran until they rid themselves from the awful theocracy that has ruined their society and lives for the past 40 years.

So you think isolation, crippling sanctions and threat of war is better for achieving peace in the Middle East? Do you have anything constructive to say at all?

Katrin3 -> copyniated, 2016-01-16 14:17:01
They were already there months ago, together with French politicians and other businessmen, including the owners of a large chain of hotels. This is about their 3rd or 4th visit. All embassies, apart from those of the US and Canada, have reopened (most never closed in spite of sanctions).
Stephen_Sean -> subtilesubversion, 2016-01-16 14:15:34
The only way we can improve human rights is to first increase our ties between nations. Gone are the days when you can isolate a country and demand they improve human rights and expect it to work.

Anyway, not to engage in moral relativism but my country, the USA, has some human rights blemishes we need to recognize as well. Having President Obama say "we tortured some folks" doesn't help.. The dismissive tone is not conducive to addressing the situation.

pretzelattack -> Iveneverexisted, 2016-01-16 14:13:49
what appeasement? did they invade somebody?
mattijoon, 2016-01-16 14:13:35
Iran is a major player in the region, and an unstable Iran means an unstable Middle East. The sanctions relief will stabilize Iran's economy. An Iran that is no longer threatened by war and regime change can start to play a positive role in solving the region's many conflicts. At least that's the theory, I hope Iran and the West seize this unique moment.
pretzelattack -> JulianHBurchill, 2016-01-16 14:13:09
Germany had a great military, a modern industrialized society, and a history of invading other countries. Iran, not.
Katrin3 -> Mervyn Sullivan, 2016-01-16 14:10:48
Sure, stick with your close ally and Daesh/IS supporter Saudi Arabia, who the IMF think will probably become insolvent within 5-years. When that happens, they'll no longer be able to afford all those advanced weapons and other toys you keep selling them, which they then use to kill civilians in Yemen.
TheDepotCat -> AgeingAlbion, 2016-01-16 14:08:05
"But this post is about Iran, which had no business in Iraq or Afghanistan either" --- Which part about Iran trying to make things difficult in Iraq for the illegal US occupation forces in those countries, because Iran may have been a possible target for a future US invasion don't you understand...?? The idea was to make a US occupation fail in Iraq to save their own country...And it worked.
Stephen_Sean, 2016-01-16 14:06:48
Fantastic news for the good citizens of Iran. Perhaps the day will come when Iranians, Europeans, and Americans are flying freely back and forth visiting each others countries without the horrendous bureaucracy, no fly lists and such.....

Yes, I know, not the world we live in. Not yet.

Iaorana -> Katrin3, 2016-01-16 14:05:19
Even if there is one, why to go to Tehran while our MSM will not fail to provide us with a " Best of ", especially if Charlie Hebdo enters the festival
LiviaDrusilla -> AgeingAlbion, 2016-01-16 14:02:23

But this post is about Iran, which had no business in Iraq or Afghanistan either.

Actually, they weren't in either country. But in any case, surely you'll agree that Iran, which share borders and has a lot of cultural links with the above mentioned countries, had a hell of a lot mroe right to be there than countries on the other side of the world?Particularly as they could be seen as defensive actions by Iran.

And I agree - let the worthless dump of a region stew in its own squalor.

That's some hatred for hundreds of millions of people. It was really terrible of them to force the civilsed west to bomb and invade them, and create untenable nation states.

whose problems you blame entirely on the west -

No I don't. But I also don't adopt the idiotic stance of wailing over British occupation soldiers rather than asking what the hell Britain was doing invading a coutnry on the other side of the world.

ether than Gulf states or indeed Iran.

I guess your hatred prevents you from becoming informed. If you had, you'd be aware that Iran has taken in huge numbers of Iraqi and Afghani refugees.

As for the borders, don't they do multiculturalism in the Middle East then?

You really haven't got a clue, have you? Maybe Iran should re-arrange Europe's borders to suit itself? You'd be happy with that, no?

petermhogan -> vinculture, 2016-01-16 13:56:42
The fact that the Israelis and Republicans are keeping quiet is pretty strong evidence that they have a tiny spark of realization that Obama and Kerry were in the right. Not that they will ever ever admit it. Note to Republicans: Peacemaking is a good thing. Carpet bombing is a bad thing.
timeforchange13 -> TheSageofStockwell, 2016-01-16 13:55:22
There are many aspects of the British regime that are even more disturbing
petermhogan -> Papaplone, 2016-01-16 13:53:25
Sounds like the Iranians are gradually emerging from xenophobic theocracy. Hopefully other countries can also seek the path of moderation and wisdom. Israel is among those with plenty of room for improvement. The USA has the task of avoiding a lurch in the wrong direction in the next election. It is hard to find much good news around the world these days.
AgeingAlbion -> LiviaDrusilla, 2016-01-16 13:53:22
But this post is about Iran, which had no business in Iraq or Afghanistan either. And I agree - let the worthless dump of a region stew in its own squalor. Strange isn't it how people from that region - whose problems you blame entirely on the west - still choose to come to the west en mass, rather than Gulf states or indeed Iran.

As for the borders, don't they do multiculturalism in the Middle East then?

timeforchange13, 2016-01-16 13:51:49
A great day. hopefully Iran's influence will finally break out from under the malign shadow of Saudi Arabia which has held the western world in thrall for so long
CTG2016, 2016-01-16 13:40:11
Hopefully Iranians can build on this and continue to demand better relations with the west. Surly, they have had their differences with the west but they shouldn't let religious fundamentalists use Iran's past history to create hate and pessimistic attitude towards west.

As Iranians say: "There is much hope in hopelessness; for at the end of the dark night, there is light."

LiviaDrusilla -> AgeingAlbion, 2016-01-16 13:36:11

I didn't support the invasion of Iraq, for the simple reason that that region is a failure and a dead loss and should be left to its own devices.

Yeah, but it never is left to its own devices, is it? The 'troops' you weep over were part of an illegal occupation force, and therefore their deaths were legitimate. The west has been bombing, invading and propping up despots in the Middle EAst (often in countries whose borders were drawn in London or Paris) for decades. So maybe think for a minute what Western 'civilisation' looks like to people in the Middle East.

I would observe though that far more Iraqi Muslims were killed by other Iraqi Muslims than by western troops, over the usual ridiculous sectarian nonsense.

And would you also observe that most of these people would likely still be alive today if it weren't for civilized Western nations bombing thier country, disbanding their army and institutions and throwing their country into chaos?

AlatarielN, 2016-01-16 13:33:06
Good! And may I say finally. This can only be a good thing in the long run, regardless of any bumps that await them because there will be bumps, considering certain parties are not too happy about this. But this can only be beneficial to the country, its people and the world. That there're so many educated people there is going to be so helpful in the future. Slowly removing the fear will slowly remove the most important tool in the arsenal used by the theocracy to govern and changes will occur. It won't be quick, a year or two but it will happen while the stability should remain.
Javafromjava -> SoxmisUK, 2016-01-16 13:31:02
But a country that goes to war for nothing more than greed sending hundreds of thousands to their deaths including their own sons and daughters ... would you visit there ... oops you live in the UK?
LiviaDrusilla -> Iveneverexisted, 2016-01-16 13:31:02

Between the PRC and Pakistan, NK has the bomb. It's not clear exactly how to apportion credit.

Not clear, when you just invent 'facts'. China was against the NK bomb, and I doubt Pakistan - which btw also borders Iran - had anything to do with it. Really daft argument.

I can't think why anyone with full grasp of the facts

Says the person who hasn't produced a single fact.

other than those heavily invested in Obama and for his legacy to not be seen as a lame duck president who's accomplished sfa.

Please. I couldn't give a toss about Obama. I'm not a fan of his at all (though likely for very differnet reasons than you) but credit where it's due. Why do Yanks think everyone cares about their infantile politics? In any case, this deal goes well beyond Yankistan. Enjoy it.

DuneMessiah , 2016-01-16 13:10:39
There were no sanctions against Israel, which has nuclear weapons. Saudi Arabia is an Islamic fundamentalist state which sponsors terrorism. It is all hypocrisy.
GregPlatt -> vinculture, 2016-01-16 13:06:32
Vinculture: "A disaster in the making thanks to 0bama's incompetence and naivety." A disaster for Israel's aggressive foreign policy, maybe. And a disaster for the House of Saud.

If the deal sticks on the US side, expect to see Iran make a number of subtle shifts in a pro-US direction over the next few years. It will be a reflection of the outcome of internal struggles within the Iranian clergy. The Supreme Leader gave Rouhani the chance to prove that negotiations and concessions could get acceptable results. The success of the negotiations will give Rouhani's faction greater clout for similar actions until such time as either they stuff it up good and proper, or somone crazy gets elected as US President.

Phil Atkinson -> Mervyn Sullivan, 2016-01-16 13:03:46
This is more of an example of realpolitik coming from the USA (for a change), despite whatever the nutters in Congress or the military may say about it.

The USA has modified its attitude to Syria from "Assad must go!" to "OK, he can hang around for a while", simply because Syria, with Russian, Iranian and Hezbollah assistance, is gaining the upper hand. Hence the willingness for the USA to negotiate. We rarely hear the words "regime change in Syria" from our politicians any more. So it is with Iran. Apart from Iranian involvement in Syria, Iran has managed to outlast the sanctions regimes and has had to ratchet up its own development of medicines, weaponry etc in anticipation of a possible Israeli or US attack. As a country of some 80 million people, they wouldn't be a pushover in the military sense. And at what cost? It doesn't bear thinking about.

On the other side of the coin, the US and others are now seeing the Saudi regime for what it is and given a choice between the KSA and Iran, they've now decided to plump with the latter - at least for the time being.

ID5955768, 2016-01-16 13:01:15
I don't believe for one second Iran will be able to bring that much oil online so quickly. The issues which have come about through years of barely no maintenance, can't just be reversed in a matter of months. Time will tell. But the mainstream media has been pushing this for a long time to further suppress oil prices.
moreblingplease, 2016-01-16 12:57:45
Meanwhile the US and Britain are directing and supplying the bombs killing innocent people in Yemen, none of which gets coverage in the press. It is a sad bad world we live in these days. Iran is probably less of a threat than Saudi Arabia which funds extremists who are so close to Isis and the likes yet do we care. It seems not.
ham zed -> MrHumbug, 2016-01-16 12:53:05
That is why Iran never trusts the US.
TheSageofStockwell -> vinculture, 2016-01-16 12:50:26
I can just imagine the skill, tact and diplomacy with which Trump or Cruz would approach this task...
FatuousFeminist -> Mervyn Sullivan, 2016-01-16 12:45:49
If only we had strong leadership like W Bush neh? He'd have strongly Decidered his way to victory just like the gleaming success next-door. Pass the bong.
bcnteacher -> Michael House-Party Fleming, 2016-01-16 12:44:02
I may have the state wrong but please don't tell me you think the USA is a bastion of tolerance! Gays are beaten up, blacks are shot, muslims are attacked. America is home to some of the world's best fed bigots.
Mike_UK -> TheDepotCat, 2016-01-16 12:38:23
Go read the IAEA reports over the years, they are the worlds experts that know exactly what is required for civilian nuclear energy and what is used for nuclear weapons = they know. What has been agreed is for Iran to curtail their weapon development and export certain products to Russia and possibly USA as part of the deal. Of course if you do not want to dig into the technical details of years of IEAE reports you can chack out what is said on Facebook and blogsville!
LiviaDrusilla -> Iveneverexisted, 2016-01-16 12:35:45
Honestly, I'm starting to almost feel sorry for the failed sanctioneers, so pathetic are their arguments.

If North Korea, the world's most isolated country - which struggles to feed its own people - could build a bomb, do you seriously think Iran couldn't? And if they were determined to do so, why did they join the NPT in the first place? And why didn't they later leave, something they were free to do at any time? Then there's the fact that the world's foremost experts have said that Iran is not pursuing a bomb, and has not done so for many years (if it ever did).

But... what am I doing trying to discuss facts with you? You're obviously way more comfortable with some bizarre scenario straight from Bibi's cartoon. Best we leave you to it, and the rest of the world can get on with business.

TheSageofStockwell, 2016-01-16 12:33:13
Please let's try and be positive about this. Iran has been a pariah state for far too long and I applaud Obama for extending the arm of friendship to them during his presidency.

Obviously there are many aspects of the current Iranian regime that we in the West don't like, but I would rather be taking small steps with them diplomatically to try and improve the situation than have a hostile stand off.

LiviaDrusilla -> Mike_UK, 2016-01-16 12:27:16

Also Iran is not more moderate or understanding with respect to some American dingys going near a beach in the middle of the Persian Golf!

That sounds nasty. I hope Rory McIlroy wasn't hurt.

Joking aside, it's been established that the Americans did indeed enter Iranian waters, probably intentionally. And what you cutely describe as a 'beach' was actually home to an important Iranian military facility. And the 'dinghys' were well-equipped military vessels (shame the GPS was faulty though.....) How do you think the Yanks would have reacted had Iranian vessels 'drifted' just off the shore of a US military facility? By treating them well and releasing them, complete with 'dingys', the next day? I doubt it, but we'll never know, as unlike the US, Iran doesn't tend to send its 'dingys' 11,500km away from their own territory.

But you seem to have missed the wider point here. Which is that Iran is not on trial. There are considerable grievances on both sides (objectively, the Iranian case against the US and 'west' is much more substantial than the reverse), but these matters were deliberately left off the table in these negotiations, which were aimed at solving the (non) issue of Iran's nuclear programme. The other grievances can hopefully be worked out at a later stage.

For now, however, let's celebrate what is without doubt the greatest triumph of diplomacy in recent years.

Iveneverexisted, 2016-01-16 12:26:24
A red letter day for Mohammad Javad Zarif, Iran's Revolutionary Guard, and their mission to achieve a nuclear weapons capacity, where what's holding them back most is lack of access to Western technology, currently blocked under sanctions. They have already demonstrated to their own satisfaction, and everyone else's, they can withdraw from the NPT, and run down to a fissile mass of U235 in a matter of months. What they're missing is a bomb design.
Mervyn Sullivan, 2016-01-16 12:25:03
There is no doubt that if today's weak western leaders had been the ones having to deal with Hitler, in place of Winston Churchill, the Third Reich would be ruling the world today.

The day will come when people will look back and ask what on earth were people like Obama and John kerry thinking when they did this terrible deal with Iran.

Vizzeh -> LiviaDrusilla, 2016-01-16 12:20:43
If only people were "informed" on the inner workings off it all politically/economically. I am 100% For the American constitution and see the political corruption, the US is being used, like many other nations, against each other.
Vizzeh -> MrHumbug, 2016-01-16 12:18:14
The Saudi's are being played too... (although they are corrupt as hell so who cares) Likely against each other.
LiviaDrusilla -> AgeingAlbion, 2016-01-16 12:16:16
"Your" troops were an illegal occupation force, and therefore legitimate targets.

Besides, given that the thinking at the time was along the lines of ''Real men go to Tehran'' and that coupled with Shrub's idiotic 'axis' speech, then who could blame the Iranians for wanting to slow down the 'progress' of an invading army who might well have had them in their sights too?

Oh, and what do you have to say on the West's support for Iraq in a war which killed hundreds of thoussands of Iranians, many of them civilians? Or the shooting down of an Iranian civilian jet, killing all 280 passengers on board?

MGBrit -> hobot, 2016-01-16 12:11:53
USA. They've been there for years with drones and bombings, I know.
Babak Taurus ૐ, 2016-01-16 12:11:37
Good news indeed. For along time western trust in Saudis oil and money cost the Middle East a massive fortune. I hope the world see how peaceful Iranians are an those extremist in Iran are literally the minority. Today I feel proud because diplomacy solved a very complicated issue which I wouldn't see it coming. Thank you mr Zarif...
Win-Win
LiviaDrusilla -> andytyrrell, 2016-01-16 12:10:39
Oh, OK, I getcha!

I just wanted to explore this idea of why any argument against Iran, or anyone for that matter, having such weapons, irrespective of whether they plan to or not, isn't applied to the debate about whether or not we should get rid of our (UK) own.

If we put aside sheer hypocrisy (always an important feature of foreign policy!) then I think the usual argument is that, unlike we rational Westerners, the Iranians are crazy religious maniacs who can't be trusted with a bomb. In reality, though obviously the Iranian regime is a religiously-based one, they have shown themselves to be quite pragmatic and cautious over the past 2 decades at least. Which isn't to say the regime is benign, by any means, just that their foreign policy is based on rational self-interest (or their perception thereof) - just like any other country.

Another reason given is Iran's supposed 'support for terror organisaitons'. Putting aside the fact that defining what is a 'terror organisaiton' is largely a matter of one's political views, it's hard to see what this has to do with the nuclear issue specifically. Unless we buy the notion - straight from a 5th rate James Bond knock-off - that Iran could 'give' its (non-existent) nukes to a 'terrorist', as though a nuclear bomb was equivalent to an AK-47.

So, having disposed of those 'arguments', I think we're back to hypocrisy as the motivator.

Vizzeh -> Themediaspoonfedlad, 2016-01-16 12:03:49
If these coups continue, there will be no-one left to overthrow politically/economically, once the political safety-net is gone and there is no more political buffer zones, potentially those on the outskirts left opposing this, would backed into a war.

I don't back any country with Nukes, but I do back the balance off power, if Iran is overthrown with Syria, it would be dangerous times for the rest off us. It would be "safer" for Israel too disarm, followed by Pakistan, North Korea then East + West Bilaterally, simutaniously.

All under the helm off a Strong-Moral UN. A Free, Regional agreement.

AgeingAlbion -> nearfieldpro, 2016-01-16 12:03:26
Iran spent years supplying IEDs to kill our troops in Iraq and Afghanistan
OldSnort, 2016-01-16 11:58:51
Better to jaw, jaw than to war, war.
spotthelemon -> Zod Buster, 2016-01-16 11:56:51
Iran isn't Nazi Germany, if you want to pursue that analogy then its closer to Franco's Spain and we got on well if occasionally frostily with them for 39 years without having a war with them
Themediaspoonfedlad -> Andrew Nichols, 2016-01-16 11:55:48
Can anyone take the risk of allowing Iran to even play around with this stuff in anyway shape or form ? The west started this fight years ago and has
1. Up to 1953 robbed Iran of its oil.
2. After a progressive Persian govt renationalized and booted British Petroleum out of the country suffered a coup d'état instigated with US aid in 1953.
3. 1953 to 1979 Suffered a tyrannical US/UK regime under the Shah of Iran which led to the Islamic Revolution , ie we radicalized them.
4. After the revolution we armed Saddam Hussein to start a war and killed millions of Iranians.
5. Sanctions for the last 10 years.

What on earth do we do now?

MrHumbug, 2016-01-16 11:54:47
If I were Iranian I'd be double wary now of US's intentions. It seems that the working method of the "West" nowadays is to feign a warming of relations to draw yourself closer before a fatal stab. Remember Libya? And I recall Syria having a nice "warm up period" before the gates of hell opened. Take care, Iran.
Iconoclastick, 2016-01-16 11:54:14
4th or 5th largest proven/unproven reserves on the planet. I'm delighted sanctions are freeing up in Iran, but I can't be alone in thinking that the USA were going to find some devil in the detail for it not to go ahead, to be delayed. Still highly suspicious of USA motives here, but for now rejoice Iranian people. :-)
Vizzeh -> Andrew Nichols, 2016-01-16 11:52:21

The annula reports of the CIA/Mossad/German BND and the IAEA supported this fact consitently since 2004. It was only the despicable US/Israeli geopolitics enabled by their propaganda arm the mainstream media

I have always wondered on the conflicts off interest in this, doesn't the Security services support the political agenda for the most part? Have seen it over the last 100 years, on reading about it, maybe not entirely but compartmentalized they seemingly do.

I know in Syria, the Pentagon is apparently completely split, some feeding information around to Assad, while another faction supports the overthrow. Difficult to discern what is true/false but much of it does play-out/check-out logically.

However, what is with the conflict of interest in this case? I guess one is suppressing religion on 1 side, yet supporting the end of times theme on the other. Perhaps that is where the Military end this support on a Nuclear scale.

Themediaspoonfedlad -> Philip Bissonnette, 2016-01-16 11:42:45
I agree but China and Russia are a thorn in its side. The Russians are doing arms deals with Iran. Also a CIA led coup 1953 style is unlikely to work against a non liberal progressive govt. Iraq is in no position to be used to attack it.

Before the deal all the sabre rattling was hollow. No amount of bombing was going to stop an underground nuclear programme. Sanctions weren't working, Iran diversified its economy.

It looks to me that the west has to either start Armageddon to take Iran out or start to build bridges.

I don't think it is capable of succeeding now with either policy. This is very bad news for the future security of Israel. All thought it should be safe for 50 or so more years.

Andrew Nichols, 2016-01-16 11:39:05
Iran has always denied seeking an atomic weapon, saying its activities are only for peaceful purposes, such as power generation and medical research. The annual reports of the CIA/Mossad/German BND and the IAEA supported this fact consistently since 2004. It was only the despicable US/Israeli geopolitics enabled by their propaganda arm the mainstream media that maintained the charade of a clandestine nuclear weapon programme.
MrHumbug -> marovich11, 2016-01-16 11:33:27
Maybe it is that the US cold warriors are finally dying out. When the wall came down USSR dismantled its cold war power structure because they were the losers. US cold war professionals were the winners and saw no reason to fade themselves out - hence the often baffling aggressive and enemy-seeking US foreign policy in the post cold war period.

The problem is that times have changed now and the US has managed to rile others far enough to start their own mini-cold wars against US, particularly Russia which does have its valid reasons to feel it's been cheated and played for patsy.

Streatham -> ConventionPrevention, 2016-01-16 11:26:28

President Obama did irritate me in his State of the Union Address when he started bragging about how big and powerful the U.S. military was and how much tax payer money was spent on it. In fact it pissed me off when he said those things. It was the last thing I expected to hear coming out of his mouth.

So you weren't watching what he was actually doing over the past seven years?

According to the Bureau of Investigative Journalism, the George W. Bush administration ordered 50 drone attacks while the government of current US President Barack Obama has already launched around 500 such strikes. Obama primarily ordered assassination strikes in Pakistan, Yemen, Somalia and Afghanistan.

The United States says the CIA-run drone strikes essentially kill militants, although casualty figures show that civilians are often the victims of the non-UN-sanctioned attacks.

http://www.globalresearch.ca/obama-ordered-ten-times-more-drone-strikes-than-bush/5475415

kevinusma -> Ernekid, 2016-01-16 11:21:14
I'm an American who just got back from a 10 day visit to Iran. Iranians are among the nicest people on Earth. It is safe to visit. I had no issues when I was there. The only thing you should be worried about is safely crossing the busy streets, not terrorism or kidnapping. Don't believe the media fear machine.

http://www.thetravelsofkevin.com/american-travel-to-iran/

Streatham -> kaper39, 2016-01-16 11:19:38

Israel are a clever country to arm, the entire middle east hates them yet Israel clearly dominate their neighbours in any conflict. An ally we Europeans need with how the middle east is going

Ah, the West's colony in the Middle East.

LiviaDrusilla -> John Smith, 2016-01-16 11:17:55
Well, a low price is better than no price.

And Iran, unlike the Gulf sheikhdoms, is a real country with educated people. With sufficient investment and freedom to trade, Iran should easily be able to develop an economy which is not entirely dependent on oil - or gas, of which Iran has some of the largest deposits in the world. I'm not sure the same could be said for the petrostates on the other side of the Gulf.

BigJim1, 2016-01-16 11:16:50
" there remains a lack of clarity with regards to the US." - as ever you never know what the US is going to do, and I suspect the US itself does not know given it dysfunctional political system. Any system that could even contemplate the likes of Donald Trump for the office of President cannot be fit for purpose.
Alice38, 2016-01-16 11:15:41
Except that Iran will secretly make a nuclear bomb anyway.
USA and the rest of the world have been duped.
In the end ordinary Iranians who just wanted peace will not get it . Will not get it while they live under a mediaeval dictatorship that is
John Smith, 2016-01-16 11:14:12
"Lifting of Iran sanctions is 'a good day for the world'"

Unless you are Venezuela, Russia, etc and dependent on oil prices.
In many ways, not much has improved for Iran either, they can sell oil but at a very low price.

Vizzeh, 2016-01-16 11:12:48
This is a good day as it allows freedom off the Market... Next moves shows the world-stage who is motivated by Orwellian-double-speak (crying wolf) or those who indeed are the aggressors....

It would be interesting if it wasn't morally evil and destructive. It is a chess board.

Themediaspoonfedlad, 2016-01-16 11:07:52
Ho ho ho. This is a ceasefire. The whole project for the Middle East revolves around it's Palestiniasation , ie leave it in tatters with no state or economic infrastructure, eg Palestine, Lebanon, Iraq , Syria , Libya . All have suffered through foreign intervention largely US sanctioned. For the last 40 years since the west financed and armed Saddam Hussein to fight and destroy the state of Iran after it deposed the Shah this has been policy. This ideal I s like an unfinished course of anti-biotics , ultimately if you leave Iran standing it will always be a power base which can fill the vacuum in all these failed states.
There is no going back from the damage done...Iran has to be the West's next horizon if there is never going to be a nuclear Islamic state this century.

May a dead man say a few words to you, general, for your enlightenment? You will never rule the world... because you are doomed. All of you who demoralized and corrupted a nation are doomed. Tonight you will take the first step along a dark road from which there is no turning back. You will have to go on and on, from one madness to another, leaving behind you a wilderness of misery and hatred. And still, you will have to go on... because you will find no horizon... see no dawn... until at last you are lost and destroyed. You are doomed, captain of murderers. And one day, sooner or later, you will remember my words...

budigunawan -> MediaWatchDog, 2016-01-16 11:06:48

The far right in Israel, not for everyone. Saudi and far right wing Israel have a symbiotic relationship. Saudi can push it's agenda of Wahhabism that secures it's brutal regime and far right Israel profits from the bitter fruits of Saudi, as it means that Israel is seen as the anti-muslim anchor of the West in the region. Sadly, the political intervention of the US has been based around protecting and supporting this symbiotic relationship with money, troops and bombs.
Vizzeh -> JohannesL, 2016-01-16 10:50:53
Depends on the use off the word terrorist, if you mean fabricated terrorism for aggression, to forward political goals/Land/Economic reasons, or if you mean terrorism in defence of a Nation or a civilisation being oppressed....

It is based on perception, or rather delibrate ignorance. It is terrorism if it is at the expense off another mans freedom.

It boils down to morality aswell, but since the various factions, possibly even media are doing a good job too blur those lines, it makes it easier for people who do not think for themselves, to be either delibrately obtuse/Ignorant.

One man's freedom fighter is another man's terrorist

- Ghandi
copyniated, 2016-01-16 10:49:43
Obama has already issued an order(today) lifting sanctions on the sale of passenger airliners to Iran. Boeing & Airbus are in intense competition as Iran plans to purchase 500 airliners in the next 10 years worth billions of dollars.
PigeonBomb -> LeftOrRightSameShite, 2016-01-16 10:48:35

I'll take it with a pinch of salt given the lack of corroboration. There are many confirmed stories of injustice from inside Iran but I can see why you picked this one. True or not, it certainly makes a sensational headline.

errr ... OK ... how about these them apples:

http://www.pinknews.co.uk/2015/07/19/vigil-marks-10th-anniversary-of-iran-hanging-two-gay-teens/

sensational and sour enough for you?

LiviaDrusilla -> mj50, 2016-01-16 10:48:27
I suspect they were hoping that once Iran had 'complied', sanctions would be dropped and everyone could get back to business.

They then, rather belatedly realised that for the Yanks, Bibi and the Gulf sheikhdoms, sanctions weren't a means to an end. They were the end. Happily, only one of the above three players really counts, and they finally saw sense.

usini, 2016-01-16 10:47:41
Th key point is that it is not only about the US and the EU. India, China and Russia will also see both great opportunities both to export and in general to develop trade. India has already talked about building a pipeline to Chah Bahar.
LiviaDrusilla -> wilding45, 2016-01-16 10:45:59

100billion of unfrozen assets - how much is going to find its way into London property making prices even more ridiculous.

Almost none, I expect. Iran is a country of about 80 million people, with an economy which has been severely held back through years - even decades - of sanctions. In that context, 100 billion isn't actually that much, and I expect the Iranians will find no shortage of ways to use it at home. And given that the Iranian government is still highly suspicious of the Brits (for very good reason) I very much doubt they'll want to spend this much-needed cash on overpriced pads in Blighty.

London's a kip anyway.

JohannesL -> kaper39, 2016-01-16 10:42:42
George W Bush said he got his orders from God, and they were amazingly similar to the ones he got from Big Oil. We know the results.
andyoldlabour -> fanazipan, 2016-01-16 10:41:33
They have killed Iranian scientists in Iran. They have killed thousands of Palestinian civilians.
JohannesL -> Vizzeh, 2016-01-16 10:41:03
Surely Iran is much less a terrorist supporter than the US and the UK?
chalkandcheese -> Ben Latimore, 2016-01-16 10:36:53
Apologies, I thought you were talking about Iran's extra income financing its armed forces, or its fuller influence now sanctions will be soon lifted. The 'now' in your comment lead me to believe you were commenting on the recent events discussed in the article, how mistaken I surely am to think you were being relevant.
1ClearSense, 2016-01-16 10:36:08
It i amazing how western oriented news organization by default report the talking point of the western regimes reflexively. Unlike the news bureaus in the soviet era, they don't need minders and censors, those are just built in or plugged in by interviews.
wilding45, 2016-01-16 10:34:20
100billion of unfrozen assets - how much is going to find its way into London property making prices even more ridiculous.

Unless we look at channel islands type restrictions for property market in se england our youth will only own property with inheritance and even then when the IHT threshold is well over a million if you project forward six years. (price doubles every six years).

Panda Bear -> andyoldlabour, 2016-01-16 10:33:56
Yes, there are a string of US presidents claiming God told them to do... or God wants them to be...
mj50 -> LiviaDrusilla, 2016-01-16 10:33:24
Good point, EU countries UK aside, very never comfortable with the position the west took with regard to Iran. How as the big boss in Washington decided what the policy was they had little choice.
Panda Bear -> andyoldlabour, 2016-01-16 10:31:21
Ha, ha, ha! US allies are never sanctioned, no matter how many International Laws they break, they ignore UN resolutions against them no matter how cruel and inhuman their actions. Where are the sanctions against US? Oh, can't be sanctioned can it...
frankoman -> bcnteacher, 2016-01-16 10:30:57
He can do what he likes, the US have given Israel a free pass, human rights abuses, extrajudicial killings, threats to Israeli Arabs, 'hidden' nuclear weapons, all have to be ignored while their neighbours are subjected to endless scrutiny. While this continues the Middle East will never be at peace. Palestinians are humans too.
Vizzeh -> Blenheim, 2016-01-16 10:30:09
Or those that funded the creation of Israel? in 1917 - Balflour declaration, and what is currently going on today in Israel, still by dictionary definition, genocide.
copyniated, 2016-01-16 10:30:01
The hardliners in Iran "Delvapassan", most of whom work for hostile foreign intelligence services, are also in trouble. In fact the arch spy, Naghdi of Basij whose members stormed the Saudi embassy in return for petrodollars, now says it was the monarchists who stormed the Saudi embassy. A ridiculous claim as most people in Iran know that monarchists could not even organize a birthday party.
stevenfieldfare , 2016-01-16 10:28:39
....only a good day if Iran holds to its side of the deal... if not, downstream confrontation will move from possible to probable...
LiviaDrusilla -> bcnteacher, 2016-01-16 10:28:32
I think Bibi's play-acting just blew up in his face.
ConventionPrevention -> Powerspike, 2016-01-16 10:28:28
It's scary to say the least and one wonders if it can even be brought back from the brink if someone like Bernie Sanders was to be elected. President Obama did irritate me in his State of the Union Address when he started bragging about how big and powerful the U.S. military was and how much tax payer money was spent on it. In fact it pissed me off when he said those things. It was the last thing I expected to hear coming out of his mouth. He sounded like a republican braggart. It really annoyed me. I do believe, to his discredit, that he was trying to appease the Repulicans.
LordWotWot, 2016-01-16 10:25:53
"Whoever though it was a good idea to become closely allied to the barbaric sheikhs of Arabia whose petrodollars are fueling wahhabi barbarism, is a complete idiot."......President Roosevelt
LiviaDrusilla -> Powerspike, 2016-01-16 10:25:35
Really interesting article. Thanks for linking - I love Glenn Greenwald's site.

I also loved this quote:

"A sailor may have punched the wrong coordinates into the GPS and they wound up off course."

So what could be interpreted as an act of war is down to some dunderhead 'punching the wrong coordinates'? 4realz? And of course the fact that the Yanks basically lied and did indeed intentionally violate Iranian territory will not be covered by the media. And like I said before, where are all those posters who accused several of us of being 'bots' because GPS imagery would of course show the Yanks were in international waters and the Iranians were fibbing, as always?

Vizzeh, 2016-01-16 10:20:25
Surely this is the end of Saudi Arabia if they continue to keep the oil prices low, bringing the rest of the market down with it, at the expense of their own economy (& Nation) & ours. With this Iran will likely be able to sustain an economical war with less reliance on oil as the Saudis.

No sympathy for them or their terrorist support. Still waiting on economic/weapon sanctions and condemnation off them (and anyone else involved) by the UN etc

Hottentot, 2016-01-16 10:10:37
This is good news, and it has to be hoped that the Iranian economy can now start to grow. No doubt, the Saudi and Israel won't like it, but that's though, if either of these two countries had professional leaders, then their childish, spiteful and lying screams against Iran, would never exist.

Forrest also said ongoing human rights and terrorism related sanctions in the US would have an effect. "Whilst the EU piece of the puzzle is clear, as it has already published relevant legislation amending existing sanctions measures to pave the way for early EU termination, there remains a lack of clarity with regards to the US."

Arr .... the reason possibly is that the US knows it has already pissed off Saudi and Israel, so won't push the boat out to far, thereby exasperating an unnecessary situation further.

Blenheim, 2016-01-16 10:04:47
Lifting of Iran sanctions is 'a good day for the world' Yet these gangsters who control the finance industry(US/UK), and who can and do, impose sanctions at will, are free, without sanction, to wage war against whoever they so choose with impunity. Something is not quite right here, or are we too stupid, too compliant to see it?
Dennis Pachernegg -> dolly63, 2016-01-16 09:55:22
If the US, Russia, Germany, France, Britain, Japan, and the EU say this agreement is watertight, you can safely believe that it is. Except of course, if you are smarter and better informed than all their diplomats and technical experts. Are you?
acornstooaks -> supercool, 2016-01-16 09:55:12
Ok - so you're anti nuclear weapons. Fair enough, you're free view. For me, much more importantly is the opportunity for trade. The Iranians are well educated and still have a historical connection with our country.

I am a manufacturer of made in UK retail product and will see this as a great opportunity to help build relationships and support the growth of our sustainable employment in the UK.

LiviaDrusilla -> 12inchPianist, 2016-01-16 09:54:12
If this technology is so promising, why didn't any the other nuclear nations offer themselves "a testing bed for the much safer Thorium reactor solution"? Iran isn't the world's guinea pig.
karabasbarabas , 2016-01-16 09:47:26
The sanctions are another kind of war. The tradesmen will win at the end
LiviaDrusilla -> Dennis Pachernegg, 2016-01-16 09:47:16
When sanctions started, they were nowhere near as harsh. European countries - as well as China and India - had long been growing tired of the extremely strict sanctions imposed mostly by the Americans. Though Kerry gets a lot of the credit for the deal going through, according to some reports, his European allies told him that they were going to stop abiding by the sanctions whether he and Bibi liked it or not. So he could either accept that reality or keep fighting the cartoon fight. Thankfully, he and his boss chose the sensible option.
12inchPianist, 2016-01-16 09:45:59
All the nuclear nations should have banded together with Iran to help Iran with their desire for peaceful nuclear power by helping Iran with expertise and funding to develop Thorium reactors. That would put the kibosh on Iran's nuclear weapons program and work as a testing bed for the much safer Thorium reactor solution .
Katrin3 -> marovich11, 2016-01-16 09:45:58
Unfortunately, those cooler heads, will be leaving the administration at the end of this year, when there are elections in the US. After that anything can happen.

It's been a rare pleasure to have diplomatic adults, not warmongers, in both the White House and the State Department, for the past 8 years.

Dennis Pachernegg -> oddbubble, 2016-01-16 09:43:43
Europeans already had business interests at the time the sanctions started, ten years ago. And yet they supported the sanctions. I don't see why it should be different now.
chalkandcheese -> Ben Latimore, 2016-01-16 09:41:10
You're joking, aren't you? Iran's output before the embargo was 2.6 mbpd, it has since been 1.4 mbpd.
jimbobsmells -> aberinkula, 2016-01-16 09:37:45

British foreign policy is a selective and hypocrital joke.

The quotes from Hammond today certainly prove that.
LiviaDrusilla -> Ernekid, 2016-01-16 09:37:07
Actually, it's never been that difficult for most European tourists to visit Iran. Getting the visa can be a bit of a pain, but most people who apply succeed in getting it quickly enough. And once you're in the country, you can travel pretty much whereever you like. There has been a requirement for British travellers to travel with an official guide, but I expect that will be dropped very quickly.
Katrin3 -> hoboh2o, 2016-01-16 09:31:03
Yes, unfortunately neither the UK or the US think long-term, when selling advanced weapons to the Saudis (or giving them to Israel). That may well come back to bite them, when the House of Saud falls, as it must.
damienbridges, 2016-01-16 09:29:42
Amazed this has gone through. The world's biggest and most dangerous children, Israel and Saudi Arabia, will NOT be pleased. These two are behind so much of the world's problems, far moreso than their parent the USA.
DeadDingo -> dolly63, 2016-01-16 09:28:00
where are Israels nukes pointing, out of interest?
andytyrrell -> laguerre, 2016-01-16 09:23:15
Yes I get that Laguerre, I don't think that's what they are doing either, but that's not really the point I was trying to make. Considering that, there are plenty of people around the world that think Iran does want nuclear weapons, in spite of Iran's protestations to the contrary, I'm guessing that there must be a ready argument for them not having such weapons. I'd be interested to know what that argument is and why it doesn't apply to us.
supercool, 2016-01-16 09:18:59
Welcome to the world community Iran. Not a perfect nation but which is. No point demonizing people & nations, it does more harm than good.

They have said their Nuclear use for Civilian purposes and so it has proved. Now how about those nations with Nuclear weapons and armed to the teeth with getting rid some of them. Hypocrisy of nuclear issue like most things around the world is stunning.

Powerspike -> hobot, 2016-01-16 09:08:17
The Saudis are having to use Columbian mercenaries to supplement their usual Pakistani rank and file "soldiers" in Yemen. No Saudis are ready to sacrifice their lives to further their own royal families ambitions. This is an incredible weakness but typical of a petrodollar state where all loyalties are based on money. If Saudi Arabia were attacked by even a small but determined force (such as ISIS) it would collapse like a house of cards.
Powerspike -> Zepp, 2016-01-16 09:03:33
The US has the largest prison population in the world. It also practices torture at home and abroad. It carries out executions at home and extra judicial (terror) killings abroad often using drones to do so. Compared to any of this, Iran is just a beginner.

https://en.wikipedia.org/wiki/Incarceration_in_the_United_States

Powerspike -> ConventionPrevention, 2016-01-16 08:56:19
America is the best defended slum in the western world. A few facts: Huge disparities of wealth and poverty, a rigid class system, massive unsustainable military spending around the world, a weak education system that depends on educated migrants to take skilled jobs, a declining manufacturing sector due to dumb free trade deals that built up Chinese economic power. I could go on indefinitely......but if America falls it will collapse from within through its own internal contradictions - probably in typical American style involving hubris, narcissism, blame shifting and of course lots of violence.
HowSicklySeemAll, 2016-01-16 08:51:48
Real change must come from below and not from the Americans or Europeans or Israeli lobby or sheikhdoms, or MEK or any other Iranian exile group, but the Iranian masses themselves. History has shown this to be true time and time again. Reforms were introduced in Germany, England, France, the United States, etc. only because of pressure from below, from the organized sections of the working classes and their trade union representatives and not from 'enlightened governments' or 'generous employers'. The road to reform is paved with struggle and defeats and victories.

If you want to support the Iranians in their struggle, support the labour movement there. Everything that is good about North America and Europe, or rather, the things that make life tolerable there including a decent standard of living, paid holidays, adequate working conditions, unemployment insurance, pensions, etc. was struggled for and won by workers and trade unions.

ConventionPrevention -> xredsx, 2016-01-16 08:47:16
It's all true. The U.S. Military program is over bloated and needs a severe diet. Billions of dollars wasted. Criticize the U.S. military all you like. I do all the time. ;)

Did you know that the U.S. military is second in federal expenditures only to social security? It is the second most expensive program in the United States! This is wrong.

So when some apologist says "well the military only makes up 17 percent of the budget," (which has been said to me on many occasions) tell them they are full of it.

William Livingstone -> hobot, 2016-01-16 08:39:34
Remind me, which country is currently levelling Yemen one building at a time? Oh yes, a Sunni nation Saudi Arabia.
Blenheim -> Nivedita, 2016-01-16 08:39:07
When will the civilized world see sanctions on US, UK and Saudi Arabia for dropping bombs on the Yemenis?

After the UK(Cameron) gifted a seat on the Human rights council to the Saudis?..
Anyone would think it was a thoroughly corrupt rigged game .. wouldn't they.
The west makes it up as they go along .. and you argue the toss at your peril.

Saltyandthepretz -> marovich11, 2016-01-16 08:38:44
It could also be the case that conservative voices have been muted, taking away the paranoid suspicion that has hobbled both Iran and the US.
Blenheim -> andytyrrell, 2016-01-16 08:27:02
Ha, ha, ha. Priceless. Yes, no one has ever(as far as I'm aware) put forward a reason why anyone would want to invade the UK. Why would they .. it certainly wouldn't be for the benefits many here would have us believe.

Iran however?. yes, what a tasty treat, they have significantly more to nick in terms of raw materials and other good stuff than we do .. Iran would make a far better(and now easier) target. Oh.. Bibi, despite his protestations to the contrary, must be rubbing his hands with glee, and now with the revelation that US and UK personnel are ensconced(secretly) with the Saudi's .. If I were an Iranian, I'd see myself surrounded by enemies. Would I give up the potential to make a bomb?..
Hmm. Whatever the inducements were, they're certainly not enough to see off a willful new US president with a finger on the trigger, especially as almost all have voiced the desire to bomb.

Nivedita, 2016-01-16 08:20:06

But he said while all nuclear-related sanctions on Iran will be lifted, other sanctions such as those related to human rights and terrorism will remain in place

Sanctions on Iran were illegal and the people of Iran were punished for the nukes they never wanted to build. When will the civilized world see sanctions on US, UK and Saudi Arabia for dropping bombs on the Yemenis?

xredsx -> ConventionPrevention, 2016-01-16 08:08:09
I hear you on this. I heard that the American cost of the new F35 fighter jet program is enough to buy every homeless American a $600,000 house. I'm not criticizing the USA military program or anything just highlighting the simple cost for America to help it's own poor. Especially in today world were money created out of thin air. Even now that i have wrote this how much QE did the Fed do but couldn't house the homeless.
quorkquork, 2016-01-16 07:59:22

But he said while all nuclear-related sanctions on Iran will be lifted, other sanctions such as those related to human rights and terrorism will remain in place, most notably in the US, meaning that companies would still have to comply with those restrictions.

Meanwhile the Telegraph is calling for an alliance with al Qaeda in Syria, saying:

The reality that comes with the prolonging war might now mean that it is time to think of widening who we support – and by working with groups who would fight IS first over Assad, or indeed al-Qaida's Syrian branch Al Nusra, but who might not necessarily have the moderate qualities we would ideally like to support militarily in Syria, lest they too enact the depravity of beheadings, torture and rape which the conflict has seen too much of already.

That's before we get to Yemen, where the areas the UK has helped 'liberate' from AQ's fiercest foe, has been taken over by ISIS.

Stunning hypocrisy and outright criminality.

It's time to abandon our obsession with Syrian 'moderates'

ConventionPrevention, 2016-01-16 07:56:20
What's that Netanyahu? I can't hear you. I still can't hear you. Yeah, maybe you should set your dumb ass down and take a break for the rest of your miserable life from your anti-Obama/anti-Iran rhetoric. You are already soaking the American taxpayer for 3 billion a year, and now you are asking for 4.2 to 4.5 billion a year for the next ten years. It disgusts me how American tax payer money gets thrown around the world while people here at home are in the streets starving. How does that work, Netanyahu? You tell me, how does that work, you miserable fool.
Blenheim -> VoodyAlen, 2016-01-16 07:41:26
Yes, but as we've seen previously under Bush Jnr, how long does it take to start an illegal war and who will stop the US in an illegal war? .. it certainly won't be us in the UK .. inexplicably we seem to love whatever the US does be it legal or absolutely illegal.

I'm pleased sanctions are being lifted, but until we discuss as adults the Palestinian/Israeli issue plus Israels nuclear arsenal - which quite ludicrously seems immune even from being acknowledged, then tensions will remain. We can't keep ignoring this issue and the injustices in Palestine in the blaise fashion with which we apply sanctions to others. The west's current hypocrisy stinks.

ConventionPrevention -> Powerspike, 2016-01-16 07:30:19
This is what I heard on the news earlier in the night. I heard that the two navy boats did indeed purposely take a short cut through Iranian waters. Then the Iranian guard took pursuit. Then, the Harry Truman aircraft carrier group launched search helicopters into the area which did not help things at all and only escalated things. Finally, the Iranians took the crew.

The U.S. lies all the time. They constantly lie and then the U.S. politicians come calling for nothing short of a nuclear strike! They are insane. I can say this much. Any country has the right to board and take a vessel if it enters their waters, and that includes the stupid, arrogant U.S. This country really needs to back their shit down and take a look at what they are doing in the world. They have become very full of themselves and it stinks to high heaven. It smells like shit.

VoodyAlen, 2016-01-16 07:25:05
A great privilege to witness such a rare occasion when common sense and rationality prevail! Well done all the parties involved! Thanks for "giving peace a chance"

PS. Wondering how Republicans (especially Tom Cotton), Bibi, king Salman, n the rest of premium members of warmonger club are feeling now! .

hoboh2o, 2016-01-16 07:24:58
Anything that stops the Saudi's playing the big I am is fine by me. They've already cut off their own nose over oil prices to stop US fracking and their economy is suffering, lets hope Iran can keep it low when it doesn't suit Saudi Arabia.

The one worry is ISIS getting a foothold if the Saudi government goes tits up and getting their hands on some real shiny weapons.

André De Koning , 2016-01-16 07:22:31
"Whilst the EU piece of the puzzle is clear, as it has already published relevant legislation amending existing sanctions measures to pave the way for early EU termination, there remains a lack of clarity with regards to the US."

Good, let the US who started all this nonsense feel themselves for a while what it is like to be outside trade with Iran. I bet it will not last long if companies realize they are still not allowed to do business because of their own extortion over the many years while the EU does commence trading.

Blenheim -> aberinkula, 2016-01-16 07:21:45
That British troops are involved in Saudi's dirty war - and it seems very dirty indeed, is nothing short of scandalous. Questions should be being asked surely?..
Blenheim, 2016-01-16 07:19:20
But it's somewhat academic isn't it?.. Whichever sweetheart with the exception of Bernie Sanders, who happens to con their way into the US hot seat, they've all taken against Tehran in a big way haven't they. Almost all of them have promised at some stage in their self-serving careers to bomb Iran back to the stone age, even the occasionally economical with the truth Hilary Clinton who tries so very hard to convince she's actually a human being has an issue in that regard.

I really do hope you have an insurance policy Iran, I wouldn't trust these liars as far as .. and I'd advise using some of what's rightly coming your way to insulate against future western blackmail.

I'd buy a bloody big bomb .. but keep it quiet, you never know who's listening .. Ha, yes we do!

aberinkula, 2016-01-16 07:01:42
Sanctions should never have been imposed. They are a form of collective punishment that has stopped medicines coming into Iran and punished small businesses. I know from experience. I had salmonella in Iran when I was two, and medicines that would have been free under the NHS were so expensive in Iran due to sanctions that my father had to sell his Mercedes Benz (not sure he's ever quite forgiven me for that). Meanwhile, Israel's nuclear arsenal goes unmentioned and unpunished, and we have British troops sitting in the Saudi war rooms. British foreign policy is a selective and hypocrital joke.

Well played to all those on both sides responsible for the recent progress, though I am more than slightly concerned that the next US president will see things rather differently. Let me also say that Louise Mensch's recent tweets have been nothing short of disgusting and wholly inflammatory, exactly the kind of rhetoric that the world community should be shunning.

Powerspike, 2016-01-16 06:58:40
I'm pleased that whoever it was in the US military command who tried to use the sailors to provoke a clash with Iran and scupper the end of sanctions did not succeed. There should be a full enquiry and the traitor exposed and charged. Let's hope Seymour Hersh gets on the case as soon as possible!

https://theintercept.com/2016/01/15/the-u-s-radically-changes-its-story-of-the-boats-in-iranian-waters-to-an-even-more-suspicious-version /

Zepp, 2016-01-16 06:51:45
The US specializes in lack of clarity. Remember the two boats that Iran detained the other day? The US initially said that they had a mechanical failure and drifted into Iranian territorial waters. That version of events has become non-operative, and now the US is saying that the boats were fully operational, but one of the sailors accidentally punched the wrong GPS coordinates in. And then, of course, they failed to notice that they were getting awfully close to that island where Iran maintained a base.

Fortunately, we didn't have Cruz in the White House, threatening to nuke Iran for detaining American sailors for trespassing, even though it's clear they were question, fed, fueled up and sent on their way. The Iranians, at least, were civilized, albeit involuntary hosts.

MediaWatchDog, 2016-01-16 06:43:23
Excellent news, progression towards a peaceful resolution. Heart breaking news for Israel and Saudi Arabia!

[Jan 16, 2016] Obama doctrine -- sanctions for everybody who does not agree with the administration

Notable quotes:
"... There's too much politics in sanctions - it's almost an Obama doctrine - sanctions rather than anything else kind of thing, so there was always a political impetus to show they were successful - which was particularly easy to do if successful had no definition. ..."
peakoilbarrel.com

Watcher, 01/16/2016 at 6:25 pm

Never been a believer that Iran was all that constricted by it all. There's too much politics in sanctions - it's almost an Obama doctrine - sanctions rather than anything else kind of thing, so there was always a political impetus to show they were successful - which was particularly easy to do if successful had no definition.

Lotsa talk about Iran exporting condensate in big quantities all during the sanction period. That was income and condensate then may have brought in more money than crude would now.

Article yesterday saying Iran was going to reprice whatever they export - something other than currency. Ominous precedent.

likbez , 01/16/2016 at 8:23 pm
Obama not only uses sanctions for anybody who does not agree with his administration policies, his administration and he personally also is complicit with this bonanza of unlimited financing for shale patch:

=== quote ===
Senator Barack Obama: "I mean we send a billion dollars every day to foreign nations because of our addiction to foreign oil, and in the bargain we drive up our gas prices because of high demand, so it's hitting you in the pocket book. " (Senator Barack Obama, Remarks At A Campaign Event At The University Of Alabama, Birmingham, AL, 1/26/08)

[Jan 16, 2016] Iran oil exports: where do they go? by Ami Sedghi

This is Guardian article written just before imposition of sanctions in 2012.
Notable quotes:
"... Pure colonial greed - Neo Cons get back in your boxes and stop lusting after Iranian oil. Morally and financially bankrupt Western countries need to keep out of other peoples affairs. ..."
Feb 6, 2012 | www.theguardian.com

The top destination for Iran's crude oil exports in the six months between January and June 2011 was China, totaling 22% of Iran's crude oil exports. Japan and India also make up a big proportion, taking 14% and 13% respectively of the total exports of Iran. The European Union imports 18% of Iran's total exports with Italy and Spain taking the largest amounts.

Sri Lanka and Turkey are the most dependent on Iran's crude exports with it accounting for 100% and 51% of total crude imported, respectively. South Africa also takes 25% of its total crude from Iran.

Bobmex , 22 Feb 2012 9:48

It's all about keeping Israel top dog in the area. Wipe out the competition one by one.

borderboy , 22 Feb 2012 2:50
'The top destination for Iran's crude oil exports in the six months between January and June 2011 was China, totalling 22% of Iran's crude oil exports. Japan and India also make up a big proportion, taking 14% and 13% respectively'

- I think even any common or garden moron can see the game plan here.. Time to plant the seeds of democracy...again

FatBobby -> firstnamejames , 21 Feb 2012 10:16
firstnamejames - The world should give thanks that you aren't in a position of power!

Diplomacy and sanctions are time consuming? Not half as time consuming as 'kicking ass' George Bush style. The Wikipedia entry for the War in Afghanistan is dated (2001-Present)….. that's what you call quick, decisive action!

What was required post-911 was for the US to have a long, hard think about its foreign policy, but instead they lived gloriously to stereotype and played right into Bin Laden's hands.

Bali 02... Madrid 04... London 05... that's the price you pay for 'quick, resolute' action.

We nuke Iran and the consequences will be life altering - not just for the Iranian people either.

harrylaw , 21 Feb 2012 6:03
This report is wrong, like most of the scaremongering on this issue, Iran did not threaten to close the strait of Hormuz in retaliation for the oil embargo, they threatened it in retaliation for a strike on their entirely legal nuclear facilities, the Western medias attempt to gin up a war with Iran are both foolish and pathetic...
RedRush , 20 Feb 2012 17:11

Pure colonial greed - Neo Cons get back in your boxes and stop lusting after Iranian oil. Morally and financially bankrupt Western countries need to keep out of other people's affairs.

The hypocrisy of the West is breath taking - attack Iraq over war crimes vs the Iranians, non-existent WMD in Iraq just as in Iran now, swap sides in Libya by funding militias led by so-called Al Qaeda men and the bleat on about UN resolutions when the elephant in the room (Israel) continues to abuse Palestine people and then continue to sell arms to other dictators around the world.

malcom, 20 Feb 2012 13:28
Well I suppose anyday now there will be a nuclear test in Iran and that will be that. Iran will be welcomed to the nuclear club with India and Pakistan and North Korea.

I guess Russia or China would probably lend Iran a small nuke for the undergrond test.....

That will be adios to the Israeli aggression in the region.

icurahuman2, 20 Feb 2012 8:37
I might note that proven reserves are NOT the same as recoverable reserves, the distinction is a quite huge difference. Also Saudi Arabian numbers are only guesses as the true numbers are a closely guarded state secret. It should also be noted that the north of Iran is on the Caspian Sea and any regional conflict would impact those nations and their gas and oil development too. Of course the Kurdish oil in Northern Iraq would also be at risk and I doubt the Iraq government would care one jot if it came under fire. The Strait of Hormuz isn't the only oil that would be effected should this all blow up.

[Jan 15, 2016] Crude drops below $30 with Iran sanctions about to be lifted

Notable quotes:
"... This is three or four months ahead of what the market was thinking last year, so it just adds fuel to the fire, ..."
"... "Lower oil prices have been a sentiment leader for the recent market selloff and will again be in focus with Iranian sanctions expected to be lifted next week," ..."
"... "How fast Iran can put oil back on the market will now be a key issue for oil markets, with many skeptical that it will be able to do this nearly as fast as it has forecast," ..."
"... It is the wrong time for Iran to be returning to the oil market, both for the market and (probably) also for Iran. It would have been so much more ideal for Iran to return to the oil scene if prices were soaring at $100, ..."
RT Business
The Brent and WTI crude benchmarks slid below $30 per barrel on Friday, as investors worry about Iran's earlier than expected return to the oil market. International sanctions on Tehran may be lifted Monday, allowing the fifth-biggest member of OPEC to boost oil exports. "This is three or four months ahead of what the market was thinking last year, so it just adds fuel to the fire," Mitsubishi Corp oil risk manager Tony Nunan told Reuters.

"Lower oil prices have been a sentiment leader for the recent market selloff and will again be in focus with Iranian sanctions expected to be lifted next week," Ric Spooner, a chief analyst at CMC Markets, said in a note on Friday, quoted by Bloomberg.

"How fast Iran can put oil back on the market will now be a key issue for oil markets, with many skeptical that it will be able to do this nearly as fast as it has forecast," he added.

Iranian and US officials have confirmed that the central vessel of Iran's Arak heavy water reactor has been filled with concrete following the removal of its core, bringing Iran closer to meeting the requirements for having international sanctions lifted.

Iranian oil would add to the glut that has made prices collapse since the middle of 2014.

"It is the wrong time for Iran to be returning to the oil market, both for the market and (probably) also for Iran. It would have been so much more ideal for Iran to return to the oil scene if prices were soaring at $100," Phillip Futures said in a note, quoted by Reuters.

[Jan 15, 2016] Oil sinks below $30 as Iran prepares to turn on the pumps

Notable quotes:
"... Iran has resisted calls from rival Saudi Arabia to hold back on production in the face of faltering global energy demand. The rift between the two Middle East powers has paralysed Opec - the world's oil cartel - which has abandoned formal production targets for the first time in its history. ..."
"... Falling oil prices are expected to push down global inflation by 1pc in 2016 according to estimates from J.P. Morgan. ..."
Telegraph
Iran has resisted calls from rival Saudi Arabia to hold back on production in the face of faltering global energy demand. The rift between the two Middle East powers has paralysed Opec - the world's oil cartel - which has abandoned formal production targets for the first time in its history.

European Union and US authorities are expected to formally lift a decade of sanctions - which include embargoes on Iranian oil in Europe - this weekend.

... ... ...

Falling oil prices are expected to push down global inflation by 1pc in 2016 according to estimates from J.P. Morgan.

[Jan 15, 2016] Oil drops below $30 as Iran supply fears mount

Notable quotes:
"... Iran is on track to ship 1.10 million barrels a day in January, a 20 per-cent rise on December, according to Reuters reports. ..."
"... When completion of the deal is announced, the oil markets could see an immediate knee-jerk reaction to the downside said Societe Generale in a note on Wednesday. ..."
"... However Jason Gammel, equities analyst at Jefferies told CNBC that a meaningful further drop is unlikely, even allowing for the added Iranian supply. ..."
"... We are starting to reach the stage where we start to cause interruptions to the physical supply of oil, so I do think the price needs to come up from where it is, said Gammel on Thursday. ..."
www.cnbc.com

Iran is on track to ship 1.10 million barrels a day in January, a 20 per-cent rise on December, according to Reuters reports.

"When completion of the deal is announced, the oil markets could see an immediate knee-jerk reaction to the downside" said Societe Generale in a note on Wednesday.

The Tehran government said Wednesday that the International Atomic Energy Agency (IAEA) was set to confirm the country has met its obligations to ensure a lifting of sanctions by Friday.

"The IAEA will issue its final report on Friday to confirm Iran has met its commitments under the JCPOA (Joint Comprehensive Plan of Action)," Deputy Foreign Minister Abbas Araqchi said Wednesday according to a number of media reports.

... ... ...

Iran has the fourth-largest oil reserves in the world and the International Energy Agency believes it could add as much as half a million barrels per day to exports as soon as sanctions are lifted.

In an already oversupplied market this could help push down an already plummeting oil price.

... ... ...

However Jason Gammel, equities analyst at Jefferies told CNBC that a meaningful further drop is unlikely, even allowing for the added Iranian supply.

"We are starting to reach the stage where we start to cause interruptions to the physical supply of oil, so I do think the price needs to come up from where it is," said Gammel on Thursday.

[Jan 15, 2016] MSM drum the Iran oil flood but maybe Iran has no spare capacity at the momen

Frugal, 01/15/2016 at 9:07 am
Oil slides to US$29 a barrel, deepening gloom for global stocks as China enters bear market

International sanctions on Iran may be lifted Monday, allowing for a boost in oil shipments from the fifth-biggest member of the Organization of Petroleum Exporting Countries. Iran is trying to regain lost market share and doesn't intend to pressure prices with an export increase once sanctions are removed, officials from its petroleum ministry and national oil company said this month.

Or maybe Iran has no spare capacity at the moment.

[Jan 07, 2016] Iran and India ditching the dollar for oil trades

peakoilbarrel.com
Arceus , 01/07/2016 at 2:58 pm
Iran, India ditching the dollar for oil trades

Ditching the dollar, Iran and India have agreed to settle all outstanding crude oil dues in rupees in preparation to future trade in their national currencies. The dollar dues - $6.5 billion equaling 55 per cent of oil payment - would be deposited in National Iranian Oil Co account with Indian banks.

http://indianexpress.com/article/business/business-others/iran-india-to-settle-outstanding-crude-oil-dues-in-rupees/

[Jan 06, 2016] Oil prices give up earlier gains; languish near 11-year lows

In October 2015, the World Bank lowered its 2016 forecast for crude oil prices from $57 a barrel to $52 a barrel, due in part to expectations that Iranian oil exports would rise once international sanctions were lifted.
finance.yahoo.com

"Crude oil oversupply is still in play; however the deficit between demand and supply is getting smaller," said Daniel Ang, an investment analyst at Phillip Futures, in a note on Wednesday. "Possible changes to global supply should come from the U.S. and Iran."

Iranian oil exports are widely expected to increase in 2016 as Western sanctions against the country for its alleged nuclear weapons program are likely to be lifted.

Still, a senior Iranian oil official said the country could moderate oil output and exports once the sanctions are lifted to avoid putting prices under further pressure.

"We don't want to start a sort of a price war," Mohsen Qamsari, director general for international affairs of the National Iranian Oil Company (NIOC), told Reuters in an interview.

"We will be more subtle in our approach and may gradually increase output," Qamsari said. "I have to say that there is no room to push prices down any further, given the level where they are."

[Jan 04, 2016] Oil rises as market ponders scale of future Iran exports

Notable quotes:
"... Iran's oil exports have fallen to around 1 million bpd, down from a peak pre-sanctions peak of almost 3 million bpd in 2011. ..."
finance.yahoo.com

The statements at the weekend by (Iranian oil officials) that Iran would only increase production at the level of the market can absorb seems to be a shift in rhetoric."

Iran plans to raise output by half a million to 1 million barrels per day (bpd) post lifting of sanctions, although Iranian officials said they did not plan to flood the market with its crude if there was no demand for it.

Iran's oil exports have fallen to around 1 million bpd, down from a peak pre-sanctions peak of almost 3 million bpd in 2011.

[Jan 04, 2016] Iran will not accept cutting it output after sunctions

money.cnn.com

"Can we wait and not produce after lifting the sanctions? Who can accept it in Iran," oil minister Bijan Zanganeh told CNN in an exclusive interview on Tuesday. "Do you believe that ... our country will accept not to produce, to secure the market for others? It's not fair."

Iran has the fourth biggest oil reserves in the world and is pumping about 2.8 million barrels a day, according to experts.

Analysts expect the OPEC producer to add between 600,000 and one million barrels to output once sanctions are lifted, but Zanganeh is much more bullish.

On the flip side, demand is falling thanks to slowing economic growth in Asia and Europe and more fuel efficient cars , which is adding to the oil glut on the global market.

He said OPEC should be targeting a price of $70 to $80 a barrel. U.S. crude futures are currently trading around $46.

[Jan 04, 2016] Iran Says Its Planned Boost in Oil Exports Won't Harm Market

Jan 03, 2016 | .bloomberg.com

Iran is trying to regain its lost share of global crude sales and has no intention of harming the oil market with its planned increase in production once sanctions are lifted from its economy, Oil Minister Bijan Namdar Zanganeh said.

... ... ...

United Nations nuclear monitors in December ended their 12-year probe of Iran's research into atomic-weapon technologies, moving the country a major step closer to relief from sanctions. Iranian oil companies and banks may be able to return to international markets by mid-January, based on the pace at which the nation is disabling nuclear infrastructure.

As part of its efforts to increase production, the country will probably award Chinese companies development rights for the second phase of the North Azadegan oil field in southwestern Iran, Zanganeh said. Under an accord, the Chinese will have to submit a proposal to the Iranian oil ministry for examination and approval, he said, without identifying any companies. Iran pumped 2.7 million barrels a day of oil in December, data compiled by Bloomberg show.

The amount of additional Iranian crude reaching foreign buyers will depend on conditions in an oil market oversupplied by 2.5 million to 3 million barrels a day, the Iranian Oil Ministry's Shana news agency reported on Saturday, citing Mohsen Ghamsari, the head of international affairs at state-run National Iranian Oil Co.

[Jan 04, 2016] Iran is not for selling oil at low prices. but even if prices drop below $30 per barrel the country will increase oil output and export

Notable quotes:
"... According to the minister, Iran is not for selling oil at low prices. However, even if prices drop below $30 per barrel the country will increase oil output and export volumes until sanctions are lifted. ..."
http://sputniknews.com
According to the minister, Iran is not for selling oil at low prices. However, even if prices drop below $30 per barrel the country will increase oil output and export volumes until sanctions are lifted.

He underscored that Iran has the right to increase production and sell oil abroad.

This should be a warning sign for the countries which have taken Iran's market share in the global oil market since sanctions were imposed, he added.

He pointed out that after sanctions are fully lifted Iran will be ready to increase oil output up to 500,000 barrels a day in the short perspective, in addition to the current oil reserves. In 2016, production will be increased twofold, to one million barrels a day.

...The expert said that OPEC countries compete with each other and other nations. "The decline in oil prices was caused by OPEC countries' decision not to cut production last year. A year after, OPEC countries said they were not ready to cut output to keep the prices at $110-120. The point is that OPEC countries compete with each other over the oil prices," Takin said.

[Jan 04, 2016] Exclusive: Sanctions deal will unleash Iran's oil production, official says

Notable quotes:
"... He said OPEC should be targeting a price of $70 to $80 a barrel. ..."
money.cnn.com

He said OPEC should be targeting a price of $70 to $80 a barrel. U.S. crude futures are currently trading around $46.

[Jan 03, 2016] Bloomberg consistently use fear mongering about Iran oil that soon will flood the market

peakoilbarrel.com
Greenbub , 01/03/2016 at 4:42 pm
http://www.bloomberg.com/news/articles/2016-01-03/iran-won-t-harm-oil-market-with-post-sanctions-production-boost

Another million a day within 6 months.

"In the first phase, Iran will raise exports by 500,000 barrels a day within a week after the removal of international sanctions, he said Sunday. The country will add another 500,000 barrels a day in a second phase within six months after the curbs end, Zanganeh said. "

likbez, 01/03/2016 at 6:18 pm

Bloomberg (like most other US MSM) consistently use fear mongering about Iran oil that soon will flood the market. And provide only selective quotes from Iran officials and no facts about their industry and fields. Which reminds me Baghdad "We will push those crooks, those mercenaries back into the swamp" Bob. If this is so easy then why they gave up their share on china oil market to Saudis?

http://oilprice.com/Latest-Energy-News/World-News/Iran-Denies-Reports-It-Plans-To-Resume-Oil-Sales-With-Steep-Discounts.html

http://oilprice.com/Energy/Crude-Oil/The-Mirage-Of-An-Iranian-Oil-Bonanza.html

Ron Patterson , 01/03/2016 at 7:31 pm
Bloomberg (like most other US MSM) consistently use fear mongering about Iran oil that soon will flood the market.

Oh get real here. Bloomberg, (like most US MSM), just wants to report the fucking news. The idea that Bloomberg is part of a giant conspiracy theory, in cahoots with the government, or whomever, is just goddamn stupid.

likbez , 01/03/2016 at 8:14 pm
Comparing even with the British coverage the statement "Bloomberg, (like most US MSM), just wants to report the f**king news." is very weak.

In foreign events coverage they want to propagate a certain agenda and are very disciplined in pursuing this goal. That does not exclude that sometimes they report important news with minor distortions. But to assume that they "just wants to report the f**king news" is extremely naïve if we are taking about foreign events.

Remember all those fancy dances pretending to be news about Iran sanctions. Truth is the first victim of war. Unfortunately this war for world dominance now became a permanent business for the USA. And Iran is considered by US establishment as an enemy.

I would recommend to read AMERICAN EMPIRE by Andrew J. BACEVICH

Harvard University Press, 2002 – 302 pages

In a challenging, provocative book, Andrew Bacevich reconsiders the assumptions and purposes governing the exercise of American global power. Examining the presidencies of George H. W. Bush and Bill Clinton–as well as George W. Bush's first year in office–he demolishes the view that the United States has failed to devise a replacement for containment as a basis for foreign policy. He finds instead that successive post-Cold War administrations have adhered to a well-defined "strategy of openness." Motivated by the imperative of economic expansionism, that strategy aims to foster an open and integrated international order, thereby perpetuating the undisputed primacy of the world's sole remaining superpower. Moreover, openness is not a new strategy, but has been an abiding preoccupation of policymakers as far back as Woodrow Wilson.

Although based on expectations that eliminating barriers to the movement of trade, capital, and ideas nurtures not only affluence but also democracy, the aggressive pursuit of openness has met considerable resistance. To overcome that resistance, U.S. policymakers have with increasing frequency resorted to force, and military power has emerged as never before as the preferred instrument of American statecraft, resulting in the progressive militarization of U.S. foreign policy.

Neither indictment nor celebration, American Empire sees the drive for openness for what it is–a breathtakingly ambitious project aimed at erecting a global imperium. Large questions remain about that project's feasibility and about the human, financial, and moral costs that it will entail. By penetrating the illusions obscuring the reality of U.S. policy, this book marks an essential first step toward finding the answers.

Arceus , 01/03/2016 at 8:51 pm
Bloomberg has no agenda other than to be the mouthpiece of Goldman Sachs. Thought most people knew that.

likbez , 01/03/2016 at 10:12 pm

"Make your case against them without quoting other conspiracy theory articles if you possibly can."

Let's compare Bloomberg coverage with FT coverage of Mr Zanganeh position on the issue with Blomberg.

I will use the following article
http://www.ft.com/intl/cms/s/0/74d30686-9d92-11e5-8ce1-f6219b685d74.html

From FT article it looks like the same minister is saying quite opposite things. It looks like Iran does not want to play the role of trump card that will allow to keep oil prices low for another year or two - the implied message of Bloomberg article, which implicitly supports those who want to drive the oil market lower (which, of course, includes GS)

== start of the quote ===

"Some of the Opec members believe it is better to go along with this level of production," Iran's oil minister Bijan Zanganeh said after the meeting of ministers in Vienna on Friday, in a thinly-veiled dig at Saudi Arabia. "I didn't have any other expectation."

Mr Zanganeh has been among ministers calling for action to stem the drop in oil prices that have this week collapsed to near seven-year lows. His requests, like those from Venezuela and others, have been rebuffed by the group's de facto leader and largest producer.

The kingdom's veteran oil minister Ali Al Naimi and his inner circle have made clear that Saudi Arabia will not cut its output without participation from Opec rivals Iran and Iraq, as well as non-Opec countries such as Russia. Until this time, it would continue to defend its market share and sell as much of its oil as it can.

Pressure to limit production as Iran rebuilds its oil industry after years under sanctions has not gone down well in the country, which is targeting output growth of 1m barrels a day after restrictions are lifted.

In a countermove, Mr Zanganeh has said countries that have accelerated output over the past year - Saudi Arabia has increased its production to above 10m barrels a day in 2015 - should pull back to make room for Iran's production.

== end of the quote ===

So I stand by my point that there is a bias in Bloomberg coverage, who very selectively quotes Mr Zanganeh to push the agenda they favor, while in reality Iran is pushing for cutting production by OPEC to raise the price to $80 level, which they consider fair, not selling its oil at the cost futures markets now dictate like Saudis do. That's a big difference.

[Jan 02, 2016] Iran Denies Reports It Plans To Resume Oil Sales With Steep Discounts

Jan 02, 2016 | OilPrice.com
Iran is dismissing a report that it plans to offer steep discounts on oil to many customers, particularly in Asia, when it returns to the global energy market sometime in 2016.

In an interview with Iran's Islamic Republic News Agency (IRNA) on Sunday, Oil Minister Bijan Namdar Zangeneh said Iran plans to offer only what the agency described as "regular and customary" discounts that often are available to any potential customer.

Iran's standard offer for customers in India, the world's second-largest consumer of Iranian oil, is 90 days' credit, free shipping and modest discounts on the oil itself.

[Dec 29, 2015] Why Energy Investors Are Hoping Saudi Arabia And Irans Oil Price Forecasts Are Dead Wrong

The sooner those oil sheiks sell their oil at rock bottom price, the sooner the end of their kingdoms arrive. In this sense this is not a bad development after all.
Dec 29, 2015 | Zero Hedge
Yesterday, when Saudi Arabia revealed its "draconian" 2016 budget, boosting gasoline prices by 40%, while trimming welfare programs after forecasting a collapse in oil revenue (even while allocating the biggest part of government spending in next year's budget to defense and security)

Bloomberg reported that "the kingdom's 2016 budget is probably based on crude prices of about $29 a barrel, according Riyadh-based Jadwa Investment Co."

Clueless, 12/30/2015 at 7:26 pm
With regard to peak oil, I have always [perhaps incorrectly] put most of the weight on the charts/graphs of "new discovery quantities" by year, for the past 80 years.

Put those graphs against consumption graphs for those same 80 years. Looking at those two in conjunction should give pause to most people.

Unless they believe that there dozens of elephant fields out there somewhere that have not been discovered and which will be economic at some price below $75.

The fact that Saudi can produce oil at $5 per barrel is meaningless, since they have created a country with a growing population that needs over $75 per barrel to survive as a country.

[Dec 22, 2015] Iran and Saudi Arabia to Increase Crude Oil Production in 2016

finance.yahoo.com

Iran crude oil production

Iran's Ministry of Petroleum reported that its oil sanctions might be removed by the first week of January 2015. The easing of sanctions would mean Iran could scale up crude oil production by 0.5 MMbpd (million barrels per day) to 1 MMbpd in the next six months to one year.

...Iran has the lowest production cost at just $10–$15 per barrel. It also has the lowest break-even cost in OPEC and in the world. Iran's strategic location allows it to transport vast amounts of crude oil.

[Dec 21, 2015] Iran expecting to produce 4 million barrels of oil per day

EIA estimated that an increase in Iranian crude oil production in 2016 will be around 600,000 barrels per day and is likely to occur in the second half of the year . Richard Nephew, program director for Economic Statecraft at Columbia University and former sanctions coordinator at the U.S. State Department, said in a research brief that larger volume of oil will flow from Iran in 2016, but likely not at the levels that optimists predict.
UPI.com

TEHRAN, Sept. 2 (UPI) -- Iranian oil production by the end of 2016 will be in excess of 4 million barrels per day, more than in the pre-sanctions era, the nation's oil minister said.

Iranian Oil Minister Bijan Zangeneh said the country will increase net oil production by more than 1.5 million barrels per day, bringing total production for the Islamic republic to just over 4 million bpd.

"Around the end of next year, we will be close to this figure," he said in an interview broadcast by CNN.

Zangeneh said his country could become the second largest producer in the Organization of Petroleum Exporting Countries, after Saudi Arabia, within seven or eight months of sanctions relief. Production during the pre-sanctions area was around 3 million bpd.

[Dec 09, 2015] The NATO-GCC alliance sees fit to exclude Russia, Iran, Iraq, Kazakhstan and Venezuela from fully participating in the global market-place on equal terms

Notable quotes:
"... I have said the exact same thing on this blog several times before. But let me expand on this issue some more. The oil production capacity of at least these five countries is artificially suppressed by the still dominant NATO-GCC alliance: a) Russia, b) Iran, c) Iraq, d) Kazakhstan and e) Venezuela. ..."
"... To be clear, I am not moralizing here, but I am merely saying that the NATO-GCC alliance sees fit to exclude those countries from fully participating in the global market-place on equal terms. It's good old Real-politik. ..."
peakoilbarrel.com
Stavros H, 12/09/2015 at 8:31 am
I have said the exact same thing on this blog several times before. But let me expand on this issue some more. The oil production capacity of at least these five countries is artificially suppressed by the still dominant NATO-GCC alliance: a) Russia, b) Iran, c) Iraq, d) Kazakhstan and e) Venezuela.

To be clear, I am not moralizing here, but I am merely saying that the NATO-GCC alliance sees fit to exclude those countries from fully participating in the global market-place on equal terms. It's good old Real-politik.

The suppressed oil production from these regions, has allowed western oil majors, as well as much more numerous but smaller US shale drillers to increase their own production of quite marginal oil & gas deposits in the US shale patch, the Canadian tar sands, in several deep-offshore sites around the globe etc…

This is at least 50% why the above countries are allied with each other and against the NATO-GCC Empire.

[Oct 28, 2015] How Long Can OPEC Hold Out

The key here is to understand who pushed the oil to the current prices. It was not OPEC which only slightly increased its production for the last five years.
Oct 28, 2015 | Zero Hedge

...we might witness the formation of two blocks within OPEC during the next December 4 meet in Vienna. One, led by Venezuela, Ecuador, Libya and Algeria that would want to reduce production levels and the other led by Saudi Arabia, UAE and Kuwait that would stick to the current strategy of defending market share. Iran may have a neutral stance as, although it 'urged' the other OPEC members to reduce their combined production to maintain a ceiling of $70-$80 per barrel, Iran would itself be ramping up its production levels to regain its lost market share, once the western sanctions against it are lifted.

... ... ...

Although it is almost certain that OPEC will not change its strategy in its next meeting in Vienna, it is unlikely that it would maintain this stance for too much longer in 2016.

Femme Fatale

The real question is: How long can the US Dollar hold out? US Dollar Demise & WW3 >> http://bit.ly/1PyMpdw

MadVladtheconquerer

You mean in the face of the 9 trill $USD short that will have to be covered at some point?

Dollar up nicely against most majors today including the yen to 121.2.

DJTA about to go GREEN. Bottom is in.

Raymond_K._Hessel

How long can OPEC exist in a world where the FRN is losing power all over the globe, and where nations like Iran and Salafist Arabia are diametrically opposed on just about everything?

OPEC is a relic.

[Oct 23, 2015] Saudi Arabia Russia, Iran Forge Energy Partnerships

Oct 23, 2015 | Zero Hedge

No, the "atmosphere is not well," because again, the Saudis are out to achieve "ancillary diplomatic benefits" (i.e. geopolitical advantages) by keeping crude prices low, and those benefits include squeezing the Russians and perhaps limiting the revenue Tehran can bring in when Iran returns to the market.

As you can see, all of this is inextricably linked and it looks as though Russia and Iran may be on the verge of attempting to challenge the Saudis for domination of the oil market (don't forget Moscow surpassed Riyadh as the number one supplier to China for the second time this year in September).

Is a "new oil order" in the works? We shall see.

pot_and_kettle

Can someone point out when Syria didn't sign off on the Qatar - Turkey pipeline and when the pipeline was first proposed? This is news to me and seems like the watershed event for what the zio-US fomented in that part of the world.

Sergeiab

http://ftmdaily.com/what-jerry-thinks/whysyria/

4shzl

Next step: open that eastern front on the Arabian Peninsula.

Freddie

Persia has been around thousands of years.

A person may not like the Russians or Iranaians but they "ain't" going anywhere. They are also pretty tough on the battlefield (see Hezbollah). They also stood up for Syrian and the Syrian people including Syrian Christians.

Persians are a lot smarter than Saudis too.

alphahammer

Yea lets take a look. Good of you to point that out.

---

China Not So In Love With Russia After All

JUN 17, 2015

Shunned by the West, Russia may want to promote its new Chinese love affair to the world these days, but Czar Romeo shouldn't get his hopes up.

Russia's second biggest lender, VTB Bank, said that most Chinese banks have foregone doing business with them. The reason? Western sanctions against VTB. China lenders don't want to get caught up in the drama and - having more business with the U.S. and Europe than with Russia - have opted to play it safe.

"China's ambiguous position regarding Russian banks in the wake of US and EU sanctions is a key issue holding back progress toward greater bilateral cooperation," VTB Bank First Deputy Chairman Yuri Soloviev write in an op-ed published by the FinanceAsia news agency on Tuesday.

Freddie

Anything that smacks the shit out of the Saudis or Qatar makes me happy. What they did to Syria with the help of the USA, Turkey, UK, Israel and others is sickening.

[Sep 27, 2015] How Russia and Iran Plan to Push Oil Prices Back above $100

Notable quotes:
"... And in turn, Remove the United States as a Superpower in the Middle East ..."
"... The bigger story however has not been the fighting but the subterfuge which was ignored by the Western mainstream media with regards to an economic war against Russia and Syria has been quite successful thus far in the guise of sanctions and destroying the price of crude oil( via CNBC ..."
"... This indiscreet economic and political war on Russia might have been perceived as a clever method to keep the bear trapped inside the Ukrainian box, contained so as to prevent any further impact on Western economies and enough to help the Wests Middle East petro partners. ..."
"... The idea is a not so subtle message to the United States and Saudi Arabia; if you continue to support ISIS and the various rebel forces in Syria and Iraq, a new united front will push them back into your lap for your nation to deal with it. ..."
"... Without any supplies crossing from Turkey or Saudi Arabia, those forces will attempt to migrate into the Kurdish controlled portions of Iraq and Turkey where they will eventually be dispersed or destroyed. ..."
"... Saudi Arabia is ill prepared to fight a two front war with Yemen on it south and ISIS/Al Qaeda to its north thus there is a high probability that terrorist units will have little trouble penetrating deep into Kuwait and the Saudi kingdom. Russia and Iran will view this as justifiable payback for the Sunni militias that the kingdoms sponsored and as such, destabilize the monarchies to the point where oil prices will be severely impacted in 2016; eventually driving the price of Brent Crude back over $100 per bbl. As China has already locked in their prices via long term supply contracts with Iran and Russia the opportunity for their forces to act in support of such an offensive in a peace keeping role is viable, usurping the U.S. hegemony in the region. ..."
"... The idea by Europe, the United States, and Arab kingdoms that a pipeline was a viable plan using mercenaries funded and supplied in the name of Syrian liberation was a myth from the beginning. Now the incompetency of their strategy may soon backfire and impact their economies far more severely than Russias, leaving a greater vacuum of power on the world stage; a void which will be filled by the new Sino-Russian alliance to purge American influence from the Middle East after twenty years of relative peace. ..."
Sep 27, 2015 | johngaltfla.com
September 27, 2015 | Shenandoah

And in turn, Remove the United States as a Superpower in the Middle East

On post super blood moon Monday, Vladimir Putin will be meeting with President Obama to discuss the ISIS crisis in the Middle East. There are many within the U.S. media who are promoting this meeting as some strange idea that the Russians are about to ask the Americans for help against ISIS. While there might be a small gnat's hair bit of truth to this, in reality, Putin is about to dictate terms and the United States is ill prepared to deal with the consequences.

In 2014, I penned a piece reflecting the true reason ISIS was created so that the Arabian sheikdoms could establish pipelines through Iraq and Syri a to permanently shift Europe's dependency on Russian oil and natural gas over to their own private market where they can re-assert control over the world market price. The problem is that Russia failed to see the US, British, and Arab point of view and offered what they thought was enough support to block ISIS from overthrowing Bashir Al-Assad and keep this dream from becoming reality.

... ... ...

The bigger story however has not been the fighting but the subterfuge which was ignored by the Western mainstream media with regards to an economic war against Russia and Syria has been quite successful thus far in the guise of sanctions and destroying the price of crude oil( via CNBC as of Friday, 9/25 ):

This indiscreet economic and political war on Russia might have been perceived as a clever method to keep the bear trapped inside the Ukrainian box, contained so as to prevent any further impact on Western economies and enough to help the West's Middle East petro partners.

... ... ...

The Middle East is aflame right now and the economic situation along with terrorist Islamist ideologues have exported their problems into Europe with a massive migration of millions of refugees from Syria, Jordan, Libya, and Iraq. Mixed within these people are numerous terrorist operatives as was promised by ISIS and Al Qaeda years ago but ignored by the naive European Union. The future problems this will create are another story but the question has been promoted by some in the United States asking why the Arab nations of the Arabian Peninsula have not taken any of the refugees. That answer is obvious; their economies and domestic political situations are so tentative and fragile that an influx of millions of new residents would probably tip nations like Kuwait and Saudi Arabia closer to full blown civil war within their own borders.

... ... ...

The idea is a not so subtle message to the United States and Saudi Arabia; if you continue to support ISIS and the various rebel forces in Syria and Iraq, a new united front will push them back into your lap for your nation to deal with it. By later on this year and early next year their should be sufficient forces on the ground in Syria and Iraq to push the ISIS militants into a meat grinder, eventually cutting them off from their northern forces somewhere in north central Iraq. Without any supplies crossing from Turkey or Saudi Arabia, those forces will attempt to migrate into the Kurdish controlled portions of Iraq and Turkey where they will eventually be dispersed or destroyed.

Meanwhile in the southern part of Iraq, ISIS will be left unchecked for a short duration and eventually pushed into Saudi Arabia and the GCC states, to let the sponsors of this terrorist army deal with the problems they funded and created. The brilliance of this strategy by the new alliance of Egypt, Russia, Iran, Iraq, and Syria (which may soon include Jordan) is obvious; the return of the malcontents who will feel betrayed by the House of Saud and other various sheikdoms of the region will create domestic instability and as a result the destruction wrought on Iraq's oil infrastructure will now become a GCC problem.

Saudi Arabia is ill prepared to fight a two front war with Yemen on it south and ISIS/Al Qaeda to its north thus there is a high probability that terrorist units will have little trouble penetrating deep into Kuwait and the Saudi kingdom. Russia and Iran will view this as justifiable payback for the Sunni militias that the kingdoms sponsored and as such, destabilize the monarchies to the point where oil prices will be severely impacted in 2016; eventually driving the price of Brent Crude back over $100 per bbl. As China has already locked in their prices via long term supply contracts with Iran and Russia the opportunity for their forces to act in support of such an offensive in a "peace keeping" role is viable, usurping the U.S. hegemony in the region.

The idea by Europe, the United States, and Arab kingdoms that a pipeline was a viable plan using mercenaries funded and supplied in the name of Syrian liberation was a myth from the beginning. Now the incompetency of their strategy may soon backfire and impact their economies far more severely than Russia's, leaving a greater vacuum of power on the world stage; a void which will be filled by the new Sino-Russian alliance to purge American influence from the Middle East after twenty years of relative peace.

[Sep 21, 2015] Iran Deal May Redefine The Middle East

"... A Real Politik assessment that only can come from someone who covers the global oil producing nations as a whole industry. ..."
"... The breakup of the Soviet Union was not just the fall of a single nation, but the fall of one of 2 Post WWII Global Hegemons. ..."
"... Unfortunately, the overwhelming jargon of business from the last 4 decades of unrelenting Neo-liberalism likes to refer to ¨deals¨ and Western values, as if we clip money saving coupons to be redeemed at the bargaining table with Iran. ..."
"... The US still owes the Iranians much more than "regret" for overthrowing the first true and democratically elected SECULAR government ever in the ME (Mossedegh). ..."
"... They COULD have been a true, natural ally of the West (except for the "privatize everything" schtick the West has been stuck in for the last 30 years). Such a waste. All we've left behind us is chaos, jihadis, instability, death. ..."
Sep 21, 2015 | naked capitalism
This has led to a new emerging relationship between the Saudis and Russia, where negotiations between Russia and OPEC emerged over the possibility of coordination of oil production levels. OPEC hinted that it was open to coordinated production cuts with non-OPEC members in its latest bulletin report, saying that "if there is a willingness to face the oil industry's challenges together" then the future would "be a lot better." Russian officials held meetings with their counterparts from OPEC, fueling speculation of some sort of accommodation.

Despite positive language from the negotiators, the talks so far have not amounted to much. Rosneft's Igor Sechin seemed to rule out such a scenario on September 7 in comments to the press, in which he said that Rosneft can't operate the way OPEC can. It would be difficult for Russia to cut back on its production, even if that meant some chance of higher prices. Russia's economy is hurting, and it needs to sell every barrel that it can.

Although there won't be a deal on oil output, Saudi Arabia and Russia made more progress on discussions regarding the purchase of Russian nuclear power plants and military equipment, a likely wake-up call to the U.S. and UK, the Saudis' longtime military suppliers. Still to be determined is whether this is a new alliance or merely a show of Saudi independence.

... ... ...

The EIA reports that in the last five years, the U.S. 'shale oil revolution' has enabled the U.S. to more than halve its oil imports, making it far less dependent on imports from OPEC, and significantly changing the terms of the relationship.

There is a lively ongoing argument in the world press about the possibility of the nuke deal leading to an entente between the U.S. and Iran, or even the possibility of an actual alliance.

Hardcore opponents of the deal claim that Iran is already in a quasi-alliance with the U.S. in the fight against ISIS in Iraq. And, although both countries hotly deny any intent to form an alliance, there are many in the region who believe that perhaps 'the ladies doth protest too much'.

... ... ...

As reported by Nick Cunningham, on these pages, the recently announced agreement with European oil companies to extend Gazprom's Nordstream gas pipeline into Germany was a clear sign that the EU is willing to do business with Russia again; this despite the Ukraine crisis, which in the face of Middle Eastern conflicts, seems to be fading into the background.

Selected Skeptical Comments

Vince in MN, September 21, 2015 at 6:39 am

39 paragraphs of cliche ridden breathless rumor mongering. The heart veritably races waiting for the next shoe dropping.

EoinW, September 21, 2015 at 8:58 am

In my lifetime, the Middle East has had two problems: Wahabbism and Zionism. We've been on the wrong side of both. One can count on western leaders to always be on the wrong side.

If Putin appears the voice of reason, what does that make Obama? He often seems like a housewife reacting to the dramatic conclusion of his favourite soap opera…with a new episode to follow tomorrow. Almost want to write – same Bat time, same Bat channel – it's so cartoonish.

The refugee crisis has made Merkle seem almost like a compassionate human being. But we know she only cares about keeping the EU going on her watch and she can see what a threat the refugee crisis is to EU unity. How worse will that threat be when Ukrainian refugees start coming? Better make nice with Russia!

Bill Smith September 21, 2015 at 10:17 am

"Saudis offer to Israel to allow flyovers of Saudi territory in case an attack on Iran" This has been reported on and off for several years.

The "sudden military alliance between Israel and Saudi Arabia" seems overblown. There have been very scattered reports of intelligence cooperation in the past but that is it.

Of course FARS reports stuff like this:

"20 Israeli officers and 63 Saudi military men and officials were killed"

likbez September 21, 2015 at 11:22 am

"39 paragraphs of cliche ridden breathless rumor mongering. The heart veritably races waiting for the next shoe dropping."

I would agree. It is clear for me that the quality of reporting about Russia is on the level of presstitutes from WashPost.

Also it is unclear that is the USA game plan as for Iran and what this article tries to communicate does not look plausible. It might well be that the USA wants to spread their bets by including Iran into the cycle of vassals (the USA does not need allies, only vassal states) but I think Iran elite still remembers years of crippling sanctions pretty well to jump into Uncle Sam embraces. The deal is needed mainly to put additional pressure on oil prices and if it achieves its goals and Russia crumbles, Iran will be thrown under the bus by US neocons very soon and without any hesitation.

It also looks like SA leadership wants some kind of rebalancing of relations with Russia as after Egypt to rely on US neocons is simply stupid. They proved to be pretty treacherous folks and promises given are not worth the paper they were printed on.

But if we assume that neocons dominate the USA foreign policy in foreseeable future, then the key policy in Middle East will be usual "divide and conquer" policy like we saw in Iraq, Libya and Syria. And bloodshed financed from usual sources (is not ISIS the USA and friends creation ?) will continue.

What is interesting is that SA never managed considerably increase their oil exports as their internal consumption grows more rapidly then extraction. They just refused to drop the volume of their exports. Probably with tacit approval of the USA. So it looks like drastic oil price drop is mainly financial markets play (derivative and futures games) - and that means that one plausible scenario is that this is another attempt to hurt Russia and depose Putin, even by taking a hit for own shale industry and decimating Canadian oil sands. Lifting sanctions from Iran is just the second step of the same plan.

EoinW -> likbez, September 21, 2015 at 12:32 pm
If Vietnam can forget over 2 million murdered by Americans and cozy up to Washington then it must be possible to find elites in any society(even Iran) who will sell out for the right price.
Paul Tioxon September 21, 2015 at 12:34 pm

A Real Politik assessment that only can come from someone who covers the global oil producing nations as a whole industry. Not completely unsurprising, but unusual in that the only constant in the social order is change and the people making sense out of the change have to look ahead to consequences real and unintended from political decisions that impact global energy production, particularly oil. The breakup of the Soviet Union was not just the fall of a single nation, but the fall of one of 2 Post WWII Global Hegemons.

The failure of the Project for A New American Century as a bid for a unipolar, unilateral Militaristic American Hegemony has resulted in a shift back to the International as opposed to Global relations. The institutions of the Post WWII world, The United Nations, the IMF and the World Bank, with the emphasis on diplomacy as opposed to nation to nation warfare is being resurrected in the Iranian Nuclear Non-Proliferation Treaty. What has been nearly completely absent is the naming of the UN Security Councils permanent members, the victors of WWII were united in staring down Iran until they produced the desired results, namely, giving up on pushing its way into the nuclear power club. The re-establishment of normal diplomatic relations with Cuba is a corroborating development. Russia has worked with the US in Syria to eliminate the chemical warfare stockpiles of Syria as well as patiently worked to conclude a successful Iran re-approachment.

Unfortunately, the overwhelming jargon of business from the last 4 decades of unrelenting Neo-liberalism likes to refer to ¨deals¨ and Western values, as if we clip money saving coupons to be redeemed at the bargaining table with Iran. And the war party demanded that a better deal could be had, what, they could get it for us WHOLESALE! Nuclear Non Proliferation was what was at stake and the UN Permanent Security Council Members were all present to negotiate the re-integration of Iran into the United Nations.

Presidents Obama and Putin are more allied than not and the structure of an inclusive international social order are being worked out without the lies of the Bush family´s war party plans. The USA is not falling apart at the seams because other nations are finally enriching themselves, thus putting them beyond the simple command and control of Neo-con warlords. The USA is relatively weaker not due to being hood winked or conquered but because other nations have risen in their own capacity to direct self determination. Iran is welcomed to do so, just not with nuclear weapons. That is a good thing, in the eyes of the Iranians and the rest of world.

mark September 21, 2015 at 12:59 pm

Interesting article about the people that worked on this over the years.

"Who made the Iran deal happen? Here are some of the people behind the scenes.
PRI's The World"

http://www.pri.org/stories/2015-07-14/who-made-iran-deal-happen-here-are-some-people-behind-scenes

Praedor September 21, 2015 at 1:35 pm

I DO so hope it leads to a completely new alignment in the ME. I am sick to death of "Iran the great evil" bullcrap.

It has always struck me as purely a childish temper tantrum on the part of the USA because the Iranian people had the GALL to toss out OUR murderous dictator and actually run their own country for their own people. Who do they think they are?

How DARE they use THEIR oil for THEIR country rather than to serve Western oil company bottom lines and provide the US with oil that, by rights, belongs to it. Because America! That and the fact that the Iranians held some US neocolonials/neoliberals hostage for a year-ish. That's unacceptable! Americans can do anything they want to whomever they want, damnit!

The US still owes the Iranians much more than "regret" for overthrowing the first true and democratically elected SECULAR government ever in the ME (Mossedegh). Imagine what Iran and even the ME could have been by now if Mossedegh had been allowed to stay in rightful power? Iran would be a true beacon of liberty and freedom and modernity in the heart of the ME. Israel doesn't even come close. They COULD have been a true, natural ally of the West (except for the "privatize everything" schtick the West has been stuck in for the last 30 years). Such a waste. All we've left behind us is chaos, jihadis, instability, death.

[Sep 11, 2015] Iranian Oil Minister Output to Return After Sanctions Lift, $80 Crude Would Be 'Fair'

Contradictory statements. On one hand Iran wants $80per barrel prices, on the other is ready to serve as a Trojan horce to keep oil prices low. That's probaly the ffect of Bloomberg reporting ;-).

Bloomberg Business

Oil at $70 to $80 a barrel would be "fair," he said. Brent crude, the global benchmark, fell as much as 2.3 percent to $48.40 a barrel on the London-based ICE Futures Europe exchange and traded at $49.12 at 3:36 p.m. local time. Brent sold for as much as $102.86 a barrel a year ago.

... ... ...

OPEC said in a bulletin from its Vienna-based secretariat on Monday that the group won't shoulder the burden of propping up prices by cutting supply on its own, and non-member producers would have to contribute. OPEC will protect its interests and there is "no quick fix" for market instability, it said.

... ... ...

Iran plans to produce 3.8 million to 3.9 million barrels of oil a day by March, with output rising by 500,000 barrels a day soon after sanctions are lifted and by 1 million barrels within the following five months, Zanganeh said. Iran is producing 2.8 million barrels a day, its highest level in three years, and is exporting more than 1 million barrels a day, he said.

Iran has about 60 million barrels of condensate in floating storage and has no crude stored offshore, Zanganeh said.

"Immediately after lifting sanctions, it's our right to return to the level of production we historically had," Zanganeh said. "We have no other choice," he said. A slump in oil prices won't slow Iran's return to the market, he said.

[Sep 02, 2015] The Mirage Of An Iranian Oil Bonanza By Dalan McEndree

Total world production is around 86 mmbl (millions barrels a day). Iran probably can contribute additional one million barrels a day). Drop of the US shale production and Canadian sands production might be higher then that. Also Iranian internal consumption (currently 2 million barrels a day) also will rise substantially after lifting of the sanctions.
"...Projecting from International Energy Agency (IEA) data, Iran is on track to produce an average ~2.85 mmbl/day of crude in 2015. The IEA puts Iran's current sustainable capacity at 3.6 mmbl/day (defined as a level achievable in 90 days and sustainable for an extended period). "
"... it is possible that Iran will lack the domestic and foreign resources necessary to increase crude output to and over 4 mmbls/day by 2020."
Sep 02, 2015 | OilPrice.com

The P5+1 agreement with Iran on Iran's nuclear program has generated (sometimes fevered) anticipation of an Iranian oil bonanza at the end of the nuclear agreement rainbow, both in terms of the increase in Iranian crude output and the business opportunities for foreign firms in driving the increase.

The anticipation comes from several sources. Iran's crude potential is one. According to the U.S. Energy Information Administration (EIA), Iran's proven crude reserves, 158 billion barrels, are the world's fourth largest (and among the cheapest to produce at $8-to-$17/barrel, depending on the source).

Iranian public statements expressing determination to increase crude output significantly are another (to 5.7 mmbl/day, according to Mehdi Hosseini, chairman of Iran's oil contracts restructuring committee). The third is the value of potential contracts for foreign suppliers. Hossein Zamaninia, Iran's deputy oil minister for commerce and international affairs, indicated the government hoped to conclude nearly 50 oil and gas projects worth $185 billion by 2020.

Projected Output and Exports to 2020

Projecting from International Energy Agency (IEA) data, Iran is on track to produce an average ~2.85 mmbl/day of crude in 2015. The IEA puts Iran's current sustainable capacity at 3.6 mmbl/day (defined as a level achievable in 90 days and sustainable for an extended period). This is roughly comparable to Iranian Oil Minister Bijan Namdar Zanganeh's assertion Iran could increase output 500,000 barrels per day within a few months after international sanctions on Iran's economy are lifted and another 500,000 barrels per day in the following months .

... ... ...

Iran won't be able to finance this on its own. It has three "internal" sources of investment-frozen Iranian funds in foreign accounts, government budget resources (oil revenues flow to the Iranian government, a portion of which the government returns to the industry), and oil in storage. (Iranian banks evidently can't provide meaningful funding). Rough conjectures of the investment Iran could generate from these three sources in current low price environment are as follows:

... ... ...

The possibility of direct military conflict between Iran on the one hand and Saudi Arabia and its Gulf Arab allies on the other is another factor. The two sides are already essentially at war indirectly in Yemen, Iraq, Lebanon, and Syria. Moreover, just the threat of direct military conflict or an increase in regional tensions is enough to cause foreigners anxiety.

The deal structure the Iranians will offer foreign companies-Hosseini described it as a "risk service contract"-will increase rather than mitigate risk. Given their lack of capital, the Iranians will be asking foreigners to bear the upfront investment burden in return for payment (cash and/or crude) in the (perhaps distant) future. Foreigners must take into account the possibility that negative changes in the internal and/or external environment will damage the value of their investment.

Foreign investors cannot be confident Iran's internal political dynamics will be conducive to foreign investment. Not all influential Iranians or Iranian interest groups (for example, the powerful Revolutionary Guards) welcome the nuclear agreement and détente with the United States and Europe. Should the balance of power tip in their favor-or further in their favor-foreign investments could face anything from unpleasant pressure to expropriation.

Moreover, absent a binding agreement within OPEC and between OPEC and Russia on production levels, Saudi and Gulf Arab production policies will threaten the value of foreign investment in the Iranian crude industry. Saudi Arabia's sustainable capacity is 2.5 mmbl/day more than its average 10.01 mmbl daily output in 1H 2015, while the UAE has announced plans to increase output 600,000 barrels per day in the next few years, and Kuwait by 1.4 mmbl/day by 2020.

... ... ...

In Sum

While it is likely Iran will increase crude output once sanctions are lifted, it is possible that Iran will lack the domestic and foreign resources necessary to increase crude output to and over 4 mmbls/day by 2020. Absent a thaw in its relations with Saudi Arabia, the Gulf Arab states, and the West, higher and more stable crude prices, and initial positive experience for foreign companies in negotiating and implementing projects, it is more likely foreign investment will trickle into the Iranian energy industry than gush into it.

[Aug 16, 2015] Deal or War': Is Doomed Dollar Really Behind Obama's Iran Warning?

"..."At that point, I think much of the world would have had enough of the US use of the international payments system to dictate to others, and they would cease transacting in dollars."
The US dollar would henceforth lose its status as the key global reserve currency for the conduct of international trade and financial transactions..."
.
"...Many analysts have long wondered at how the US dollar has managed to defy economic laws, given that its preeminence as the world's reserve currency is no longer merited by the fundamentals of the US economy. Massive indebtedness, chronic unemployment, loss of manufacturing base, trade and budget deficits are just some of the key markers, despite official claims of "recovery.""
.
"..."If the dollar lost the reserve currency status, US power would decline," says Roberts. "Washington's financial hegemony, such as the ability to impose sanctions, would vanish, and Washington would no longer be able to pay its bills by printing money. Moreover, the loss of reserve currency status would mean a drop in the demand for dollars and a drop in willingness to hold them. Therefore, the dollar's exchange value would fall, and rising prices of imports would import inflation into the US economy.""
.
"...Doug Casey, a top American investment analyst, last week warned that the woeful state of the US economy means that the dollar is teetering on the brink of a long-overdue crash. "You're going to see very high levels of inflation. It's going to be quite catastrophic," says Casey. He added that the crash will also presage a collapse in the American banking system which is carrying trillions of dollars of toxic debt derivatives, at levels much greater than when the system crashed in 2007-08.... "Now, when interest rates inevitably go up from these artificially suppressed levels where they are now, the bond market is going to collapse, the stock market is going to collapse, and with it, the real estate market is going to collapse. Pension funds are going to be wiped out… This is a very bad situation. The US is digging itself in deeper and deeper," said Casey, who added the telling question: "Then what's going to happen?"..."
.
"...President Obama's grim warning of "deal or war" seems to provide an answer. Faced with economic implosion on an epic scale, the US may be counting on war as its other option..."
August 15, 2015 | ronpaulinstitute.org

US President Barack Obama has given an extraordinary ultimatum to the Republican-controlled Congress, arguing that they must not block the nuclear accord with Iran. It's either "deal or war," he says.

In a televised nationwide address on August 5, Obama said: "Congressional rejection of this deal leaves any US administration that is absolutely committed to preventing Iran from getting a nuclear weapon with one option: another war in the Middle East. I say this not to be provocative. I am stating a fact."

The American Congress is due to vote on whether to accept the Joint Comprehensive Plan of Action signed July 14 between Iran and the P5+1 group of world powers – the US, Britain, France, Germany, Russia and China. Republicans are openly vowing to reject the JCPOA, along with hawkish Democrats such as Senator Chuck Schumer. Opposition within the Congress may even be enough to override a presidential veto to push through the nuclear accord.

In his drastic prediction of war, one might assume that Obama is referring to Israel launching a preemptive military strike on Iran with the backing of US Republicans. Or that he is insinuating that Iran will walk from self-imposed restraints on its nuclear program to build a bomb, thus triggering a war.

But what could really be behind Obama's dire warning of "deal or war" is another scenario – the collapse of the US dollar, and with that the implosion of the US economy.

That scenario was hinted at this week by US Secretary of State John Kerry. Speaking in New York on August 11, Kerry made the candid admission that failure to seal the nuclear deal could result in the US dollar losing its status as the top international reserve currency.

"If we turn around and nix the deal and then tell [US allies], 'You're going to have to obey our rules and sanctions anyway,' that is a recipe, very quickly for the American dollar to cease to be the reserve currency of the world."

In other words, what really concerns the Obama administration is that the sanctions regime it has crafted on Iran – and has compelled other nations to abide by over the past decade – will be finished. And Iran will be open for business with the European Union, as well as China and Russia.

It is significant that within days of signing the Geneva accord, Germany, France, Italy and other EU governments hastened to Tehran to begin lining up lucrative investment opportunities in Iran's prodigious oil and gas industries. China and Russia are equally well-placed and more than willing to resume trading partnerships with Iran. Russia has signed major deals to expand Iran's nuclear energy industry.

American writer Paul Craig Roberts said that the US-led sanctions on Iran and also against Russia have generated a lot of frustration and resentment among Washington's European allies.

"US sanctions against Iran and Russia have cost businesses in other countries a lot of money," Roberts told this author.

"Propaganda about the Iranian nuke threat and Russian threat is what caused other countries to cooperate with the sanctions. If a deal worked out over much time by the US, Russia, China, UK, France and Germany is blocked, other countries are likely to cease cooperating with US sanctions."

Roberts added that if Washington were to scuttle the nuclear accord with Iran, and then demand a return to the erstwhile sanctions regime, the other international players will repudiate the American diktat.

"At that point, I think much of the world would have had enough of the US use of the international payments system to dictate to others, and they would cease transacting in dollars."

The US dollar would henceforth lose its status as the key global reserve currency for the conduct of international trade and financial transactions.

Former World Bank analyst Peter Koenig says that if the nuclear accord unravels, Iran will be free to trade its oil and gas – worth trillions of dollars – in bilateral currency deals with the EU, Japan, India, South Korea, China and Russia, in much the same way that China and Russia and other members of the BRICS nations have already begun to do so.

That outcome will further undermine the US dollar. It will gradually become redundant as a mechanism of international payment.

Koenig argues that this implicit threat to the dollar is the real, unspoken cause for anxiety in Washington. The long-running dispute with Iran, he contends, was never about alleged weapons of mass destruction. Rather, the real motive was for Washington to preserve the dollar's unique global standing.

"The US-led standoff with Iran has nothing to do with nuclear weapons," says Koenig. The issue is: will Iran eventually sell its huge reserves of hydrocarbons in other currencies than the dollar, as they intended to do in 2007 with an Iranian Oil Bourse? That is what instigated the American-contrived fake nuclear issue in the first place."

This is not just about Iran. It is about other major world economies moving away from holding the US dollar as a means of doing business. If the US unilaterally scuppers the international nuclear accord, Washington will no longer be able to enforce its financial hegemony, which the sanctions regime on Iran has underpinned.

Many analysts have long wondered at how the US dollar has managed to defy economic laws, given that its preeminence as the world's reserve currency is no longer merited by the fundamentals of the US economy. Massive indebtedness, chronic unemployment, loss of manufacturing base, trade and budget deficits are just some of the key markers, despite official claims of "recovery."

As Paul Craig Roberts commented, the dollar's value has only been maintained because up to now the rest of the world needs the greenback to do business with. That dependency has allowed the US Federal Reserve to keep printing banknotes in quantities that are in no way commensurate with the American economy's decrepit condition.

"If the dollar lost the reserve currency status, US power would decline," says Roberts. "Washington's financial hegemony, such as the ability to impose sanctions, would vanish, and Washington would no longer be able to pay its bills by printing money. Moreover, the loss of reserve currency status would mean a drop in the demand for dollars and a drop in willingness to hold them. Therefore, the dollar's exchange value would fall, and rising prices of imports would import inflation into the US economy."

Doug Casey, a top American investment analyst, last week warned that the woeful state of the US economy means that the dollar is teetering on the brink of a long-overdue crash. "You're going to see very high levels of inflation. It's going to be quite catastrophic," says Casey.

He added that the crash will also presage a collapse in the American banking system which is carrying trillions of dollars of toxic debt derivatives, at levels much greater than when the system crashed in 2007-08.

The picture he painted isn't pretty: "Now, when interest rates inevitably go up from these artificially suppressed levels where they are now, the bond market is going to collapse, the stock market is going to collapse, and with it, the real estate market is going to collapse. Pension funds are going to be wiped out… This is a very bad situation. The US is digging itself in deeper and deeper," said Casey, who added the telling question: "Then what's going to happen?"

President Obama's grim warning of "deal or war" seems to provide an answer. Faced with economic implosion on an epic scale, the US may be counting on war as its other option.

Reprinted with permission from RT.

[Jul 27, 2015] 185 Billion Reasons Why The US Agreed To Nuclear Deal With Iran

"...Iran's energy supplies also devalue the energy exports from Russia. It's all part of Obama's full spectrum war against Putin."
.
"...There are so many factions vying for power, many with ulterior motives, who are forming counter intuitive alliances based on "the enemy of my enemy is my friend" strategies. The whole shit show has become so convoluted that at this point we (the west) might as well air drop weapons to all inhabitants, then step back and watch the fireworks. Better yet, we could mind our own business, and take care of problems here on the home front. It seems like the linked picture is emblematic of world foreign policy."
.
"...It was not long ago that media was abuzz with the fracking miracle, energy independence, USA the new Saudi Arabia etc. etc. What everyone failed to realize is all energy is not the same. Some is low cost to produce and transport, others are high cost, out at the margins of profitability. We know where Fracking stood on that scale. Not to mention Canadian Tar Mines, coming in at the top of production costs. Harper bet Canada's future on a total Tar Sands development policy. That investment is looking questionable. And I for one can find few if any new media coverage of North Dakota. Though they still produce in a desperate bid to keep meeting debt repayments. Their hedges are the only thing keeping companies alive at present."
Jul 27, 2015 | Zero Hedge
Many have questioned just why President Obama was so keen to get the Iran nuclear deal done - apparently with almost no real concessions - in the face of allies home and abroad deriding the agreement. Well, if one were so inclined, OilPrice.com explains that Iran's deputy oil minister for commerce and international affairs, Hossein Zamaninia, told Reuters that the country has already identified 50 oil and gas projects it will offer for bids - with the government pegging the value of these properties at $185 billion...

Submitted by Dave Forest via OilPrice.com,

Important news last week -- from a place that's quickly becoming the world's focus for high-impact oil and gas projects.

That's Iran. Where government officials said they are on the verge of revolutionizing the country's petroleum sector. Which could provide big profit opportunities for foreign investors.

Iran's deputy oil minister for commerce and international affairs, Hossein Zamaninia, told Reuters that the country has already identified 50 oil and gas projects it will offer for bids. With the government pegging the value of these properties at $185 billion.

And officials are hoping to get these fields licensed out soon. With Zamaninia saying that the government plans to offer all of the blocks over the next five years.

Perhaps most importantly, Iranian officials say they have designed a new petroleum contract structure for international investors. Which they are calling the "integrated petroleum contract" or IPC.

Officials said that the IPCs will last for a term of 20 to 25 years. A substantial improvement over the older, shorter-term contracts -- which have been a major stumbling point for the world's oil and gas companies.

Few other details on the IPC structure have yet been provided. But the government noted that the new contracts will address "some of the deficiencies of the old buyback contract".

Deputy Minister Zamaninia said that full details on the new contracts will be announced within the next two to three months. Along with specifics on the fields being offered by the government for bids.

Of course, all of this is predicated on the lifting of Western sanctions against Iran -- which is still not a certainty. But if and when the country does open for investment, it appears there will be substantial prizes to won. Watch for further announcements on projects and fiscal terms over the next few months.

* * *

Billions of dollars for the firms that lobbyists represent can be one hell of a motivation to do a deal with the devil it seems...

JustObserving

Iran's energy supplies also devalue the energy exports from Russia. It's all part of Obama's full spectrum war against Putin.

JustObserving

Lot more energy becomes available as sanctions against Iran are lifted. So energy prices fall and it hurts Russia.
Russia and its oil are likely to be losers in Iran deal
http://www.cnbc.com/2015/07/16/russian-and-its-oil-are-likely-to-be-lose...


Billy the Poet

"Peace, commerce, and honest friendship with all nations-entangling alliances with none." -- Jefferson

Fahque Imuhnutjahb

There are so many factions vying for power, many with ulterior motives, who are forming counter intuitive alliances based on "the enemy of my enemy is my friend" strategies. The whole shit show has become so convoluted that at this point we (the west) might as well air drop weapons to all inhabitants, then step back and watch the fireworks. Better yet, we could mind our own business, and take care of problems here on the home front. It seems like the linked picture is emblematic of world foreign policy.

http://static.tvtropes.org/pmwiki/pub/images/backwardgImage1.jpg

Billy the Poet

we (the west) might as well air drop weapons to all inhabitants, then step back and watch the fireworks.

That's called American history, 1945-2015.

Fahque Imuhnutjahb

Agreed, but it seems we used to at least make the pretense of choosing sides, hell now it's a damn free for all, literally free arms for all. It's no damn wonder 2.3 trillion of tax dollars fell down the rabbit hole, and we,

the damn taxpayers didn't even get offered any rabbit stew.

insanelysane

It's easier to go to war with someone that you have a treaty with because breaking the treaty is a slam dunk justification. No one cared what was really in the treaty as long as Iran agreed to the treaty because they know Iran will break it.

roadhazard

uh, Russia was in on the deal. You mean they fucked themselves.

CrazyCooter

Or maybe in three to five years when that huge frack ramp has run its couse and the US mean reverts to its production trend line the additional global supply coming online around that time will be sorely needed.

Don't forget one of the largest oil fields in the world is in Iran ... and it was discovered in the 80s. Saudis big field was discovered in the 40s.

If the game is going to continue, it has to have oil - and they can't print that.

Regards,

Cooter

Winston Churchill

Iran could'nt become a full SCO member with sanctions on.

None of that money,which is theirs anyway, will be going to US companies.

You can bet the farm on that.


Colonel Klink

Just goes to further prove how our politican's sell out to corporations. That's called Fascism!

Billy the Poet

Isn't it better to trade for energy than to bomb for freedom? Each scenario can be seen as supporting corporations but assuming that the corporatist paradigm is presently inescapable which corporations would you rather see prevail?

greenskeeper carl

Say what you will about the deal, but aside from all the noise, anything that avoids another war that kills a few thousand more Americans, a few hundred thousands innocent civilians, and racks up another 2-4 trillion in debt is a good thing.

Who knows, maybe those lobbyists not wanting to get their investments nationalized by the Iranian govt(which would happen in the event of a conflict) will exert more influence on whatever stooge occupies the White House than the regular neocon cheerleaders constantly looking for a new war.

Probably not , but one can hope.

roadhazard

But it's an OBAMA deal so fuck all that saving lives crap. BushCo would have hung another banner and the repubicans would cheer.

FreeMoney

There was no need for deal to made at all. Iran's oil can sit in the ground un used and unsold, while the West continued to block trade with the Mullahs. I think the Mullahs were loosing power over the prople slowly drip by drip.

No we have eliminated barriers to Iran going NUC, are dropping import and export sanctions against a regeme that calls for our destruction daily, and next we are going to give them billions of dollars for their oil so they can buy or develope weapons to use against us.

Without question, this is the stupidest course of action we could take for America.

Billy the Poet -> FreeMoney

No we have eliminated barriers to Iran going NUC

Cite the specifics or shut the fuck up. Iran was already a signatory to the NNPT which barred them from developing nuclear weapons and this treaty sets the bar even higher.

DutchBoy2015 -> FreeMoney

Stop with your stupid goddam LIES.

Iran never threatened the USA , you fucking MORON. You believe bullshit.

A group of 30 paid agents screaming ''Death to America'' does NOT a revolution make.

I bet you have never been to Tehran. You just parrot the bullshit your lying ZioNazis feed you.

Pathetic.

DutchBoy2015 -> FreeMoney

Morons like you don't have a fucking clue about the real world. YOu support despotic regimes like Saudi where women can't drive, and they behead people daily , and have actually asked Pakistan for nukes.

monoloco

So many logical fallacies there I don't know where to start. For one, what would be the motive to "buy or develop weapons to use against us" ? If the sanctions are lifted and they are participating in the world's economy by selling oil on the open market, it would be completely counter-productive to attack a country that could totally destroy the economy that lifting the sanctions enabled. But don't let logic or facts get in the way of pushing the Zionist/corporate agenda.

Babaloo

There is so much wrong with this post it almost defies belief. Let's start with this quote: "...in the face of allies home and abroad deriding the agreement." How can the writer seriously expect sentient humans to believe this? Our "allies" England, France, Germany, as well as non-allies, China and Russia were signatories to the deal! If by "allies" we're saying Israel, well, that's a whole different set of "allies" isn't it?

ajkreider

This is brilliant stuff. Obama is such a darling of the oil services industry. Is Cheney still VP?

$185 billion is chump change, and the U.S. isn't getting that anyway.

Do the people who write this garbage have paying jobs?

DutchBoy2015

German and French company CEOs are already in Tehran making deals. Not oil companies but companies like Bosch,AEG, Stihl, Miele etc.

Iranians use washing machines, power tools etc etc also.

Everything in my home is German or Korean. NOT one USA product because they don't make anything but weapons and burgers anymore.

assistedliving

185 Billion Reasons
You got a problem with that?

I lived in Iran awhile back. Imo, best place in entire Near East except maybe Lebanon. Only Iran far richer, culturally and every other way except maybe cuisine.

Jack Burton

How do you say "American frackers are dead, and several hundred thousand jobs will die." already identified 50 oil and gas projects it will offer for bids - with the government pegging the value of these properties at $185 billion...

It was not long ago that media was abuzz with the fracking miracle, energy independence, USA the new Saudi Arabia etc. etc. What everyone failed to realize is all energy is not the same. Some is low cost to produce and transport, others are high cost, out at the margines of profitability. We know where Fracking stood on that scale. Not to mention Canadian Tar Mines, coming in at the top of production costs. Harper bet Canada's future on a total Tar Sands development policy. That investment is looking questionable. And I for one can find few if any new media coverage of North Dakota. Though they still produce in a deperate bid to keep meeting debt repayments. Their hedges are the only thing keeping companies alive at present.

smacker

OK. Obola bends over for Big Oil and gets his kicks by stuffing the US workforce that will go to Iran full of CIA spies.


[Jul 25, 2015] U.S. oil supply update

"I know nothing about this stuff, can you tell me what you think is the true long-run marginal cost? Is the $67/barrel futures number close to it in your opinion?" ... "xo: I think $75 is a better estimate, though I second-guess the market only with trepidation."
"...If you do the supply-demand pairs, the resulting graph suggests that it will be quite difficult to hold the price below $85 Brent over the long run. This appears to be above the marginal cost for shales, but it's important to keep in mind that the relevant measure is system-wide marginal cost, not just that of shales. "
"...Interesting enough, the case histories tend to show that regardless of how oil exporters treat internal consumption, given an ongoing production decline, the net export decline rate tends to exceed the production decline rate and the net export decline rate tends to accelerate with time. "
Given an ongoing production decline in a net oil exporting country, unless they cut their domestic oil consumption at the same rate as the rate of decline in production or at a faster rate, the resulting net export decline rate will exceed the production decline rate and the net export decline rate will accelerate with time. Furthermore, a net oil exporter can become a net oil importer, even with rising production, if the rate of increase in consumption exceeds the rate of increase in production, e.g., the US and China.
"...A deal with Iran could bring an additional 1 mbpd onto the market, substantially depressing prices for as much as six months, I would guess. But timing and certainty are hard to predict. "
Econbrowser
Frank Flowers March 15, 2015 at 7:29 pm

Or the contracts require drilling to keep leases.
https://www.dmr.nd.gov/oilgas/presentations/FullHouseAppropriations010815.pdf.
And a rig today is not the rig in 2007. So, this graph isn't an apples to apples comparison.

Benamery21 March 16, 2015 at 4:20 am

The WSJ brings up something I was going to, and I bet it explains the difference between the DMR and EIA.

About half the cost of a fracked Bakken well is the frac job, drill rigs are typically under long term contract which are slowly expiring by the month, but the equipment leased for frac jobs is typically on a shorter timeframe. Some drilling is also necessary to hold land leases. Increasing stringency of DMR requirements on gas flaring also are delaying some completions.

Jeffrey J. Brown March 16, 2015 at 5:46 am

If anyone is interested in my 2¢ worth on this general topic, I have a number of comments on the prior article on US oil production:

http://econbrowser.com/archives/2015/03/u-s-oil-production-still-surging

However, I posted something that I found very interesting, at the bottom of the prior thread. Earlier this year, Steven Kopits' staked out a pretty lonely position regarding the outlook 2015 supply and demand (total liquids basis), and I thought it very interesting that Art Berman has an article on increased consumption that is quite supportive of Steven Kopits' (January, 2015) article on supply less demand:

http://www.artberman.com/world-oil-demand-surges-a-data-point-for-price-recovery/

World oil demand increased by 1.1 million barrels per day in February

This is a potentially important data point that suggests a crude oil price recovery sooner than later. It is also important because it further supports the view that a production surplus and not weak demand is the main cause for the recent oil-price fall.

The latest data from EIA shows that February world liquids production was flat with January but consumption increased 1.1 million barrels per day. This reduces the relative production surplus (production minus consumption) from 1.68 million barrels per day in January to 0.56 million barrels in February.

Steven Kopits' (January, 2015) outlook for global supply less demand:

Supply Minus Demand, Explained
http://www.prienga.com/blog/2015/1/20/supply-minus-demand-explained

Jeffrey J. Brown March 16, 2015 at 6:37 am

Having noted Steven Kopits' continuing track record of being remarkably prescient regarding global oil supply and demand analysis, I do have one issue with global supply & demand analysis -– consumption in net oil exporting countries versus consumption in net oil importing countries, to -- wit, to paraphrase "Animal Farm," in my opinion some consumers are more equal than others.

Let's assume a scenario where all oil production and refining operations are in oil exporting countries and let's ignore things like refinery gains. Total petroleum liquids production is 80 mbpd and consumption in the oil exporting countries is 40 mbpd, and they therefore net export 40 mbpd to oil importing countries.

Production rises by 2.5 mbpd in the oil exporting countries, so total supply increases from 80 mbpd to 82.5 mbpd. However, consumption in the oil exporting countries rose by 5 mbpd. So, Net Exports = Production – Consumption = 82.5 mbpd – 45 mbpd = 37.5 mbpd.

My point is that a global supply and demand analysis would not accurately represent the situation in the net oil importing countries, i.e., a 6.25% decline in the supply available to net importers (40 mbpd to 37.5 mbpd), although global supply is up by 3.125%, 80 mbpd to 82.5 mbpd.

Of course, the crux of what I call "Export Land Model" or ELM, is that for a number of reasons (subsidies, proximity to production, legal restrictions, etc.), consumption in oil exporting countries tends to be satisfied before oil is exported.

Interesting enough, the case histories tend to show that regardless of how oil exporters treat internal consumption, given an ongoing production decline, the net export decline rate tends to exceed the production decline rate and the net export decline rate tends to accelerate with time.

For example, Indonesia subsidizes petroleum consumption and the UK heavily taxes petroleum consumption, but both former net oil exporters showed accelerating rates of decline in their net exports (in excess of their respective production decline rates).

Here are the ELM Mathematical Facts of Life:

Given an ongoing production decline in a net oil exporting country, unless they cut their domestic oil consumption at the same rate as the rate of decline in production or at a faster rate, the resulting net export decline rate will exceed the production decline rate and the net export decline rate will accelerate with time. Furthermore, a net oil exporter can become a net oil importer, even with rising production, if the rate of increase in consumption exceeds the rate of increase in production, e.g., the US and China.

The (2005) Top 33 net exporters showed a slight increase in production from 2005 to 2013, from about 62 mbpd to 63 mbpd (total petroleum liquids + other liquids, EIA), but their rate of increase in consumption exceed their rate of increase in production and their combined net exports (what I call Global Net Exports, or GNE) fell from 46 mbpd in 2005 to 43 mbpd in 2013.

Furthermore, China and India ("Chindia") consumed an increasing share of a post-2005 declining volume of GNE. What I call Available Net Exports (ANE, or GNE less Chinidia's Net Imports, CNI) fell from 41 mbpd in 2005 to 34 mbpd in 2013.

Here's the Available Net Exports problem:

Given an ongoing decline in GNE–and it's when, not if–then unless the Chindia region cuts their oil consumption at the same rate as the rate of decline in GNE, or at a faster rate, the resulting rate of decline in ANE will exceed the GNE decline rate and the ANE decline rate will accelerate with time.

From 2005 to 2013, GNE fell at 0.8%year. From 2005 to 2013, ANE -- the supply of Global Net Exports of oil available to importers other than China & India -- fell at 2.3%/year.

xo March 16, 2015 at 7:28 am

"we will settle down to a price around the true long-run marginal cost."

I know nothing about this stuff, can you tell me what you think is the true long-run marginal cost? Is the $67/barrel futures number close to it in your opinion?

James_Hamilton Post authorMarch 16, 2015 at 7:46 am

xo: I think $75 is a better estimate, though I second-guess the market only with trepidation.

Steven Kopits March 16, 2015 at 8:27 am

If you do the supply-demand pairs, the resulting graph suggests that it will be quite difficult to hold the price below $85 Brent over the long run. This appears to be above the marginal cost for shales, but it's important to keep in mind that the relevant measure is system-wide marginal cost, not just that of shales.

Much below $80 Brent, conventional supply falls off and demand grows, and shale growth is more muted. So it looks pretty hard on paper to hold prices below $80 Brent for a longer period of time. On the other hand, if we assume that shales can produce what they have recently, then prices above $90 Brent are again starting looking dicey. At this level, not only are shales more incentivized, but conventional is also more viable, and demand growth should be more muted. Therefore, I would put longer-run system-wide marginal cost in the $85 Brent range.

I disagree with JPM and some of the consultancies that prices can be kept below marginal cost for as long as two years. I believe 12 months is about the limit. Therefore, if you think I think mid-year 2016 Brent futures are compelling at $63.30, you are right. I would caution, however, that we may still have a big overhang coming in Q2, so any investment of this sort should have sufficient downside protection.

Tom March 16, 2015 at 11:25 am

The thing is nobody knows what that long-run marginal cost of production will be, and transportation costs and demand and regulation (eg limits on US crude exports) all matter. The 2020 futures contract price is no guide. We do need to think about what happens when the major US tight oil fields deplete, but the estimates that had that coming already around 2020 look very pessimistic now.

BP March 16, 2015 at 11:27 am

James your posts on oil are must a read for me, thank you.

BP March 16, 2015 at 12:00 pm

When horizontal drilling/hydraulic fracturing boom hit natural gas, a lot of executives were saying at drilling was uneconomic when gas was below $4.50 but it's been seven years now.

Jeffrey J. Brown March 17, 2015 at 9:41 am

We have seen some substantial regional declines in predominantly dry gas areas, like the Haynesville Shale Play, and to a lesser extent, in the Barnett Shale Play. The Haynesville Play is an interesting case history. EIA data show that Louisiana's shale gas production increased from 1.1 BCF/day in 2009 to 5.8 BCF/day in 2012. At this rate of increase, Louisiana's shale gas production would have been up to about 31 BCF/day in 2015.

However, primarily due to a decline in Haynesville Play drilling, Lousiana's marketed gas production (from all sources) fell by 20% from 2012 to 2013 and by another 17% from 2013 to 2014. Note that these were net declines in production, after new wells were put on line. The gross declines, from existing wells in 2012 and from existing wells in 2013 would be even higher.

Louisiana gas data:

http://www.eia.gov/dnav/ng/ng_prod_sum_dcu_sla_a.htm

The Louisiana data provide some support for a Citi Research estimate that the underlying gross decline rate for US gas production is on the order of 24%/year. In round numbers, this decline rate estimate implies that in order to maintain current US gas production, we have to put on line the productive equivalent of current Marceullus gas production–every single year, just to maintain current gas production.

The Haynesville Play is interesting for another reason, since it shows the lag time between a decline in drilling and a decline in production in this play:

http://i1095.photobucket.com/albums/i475/westexas/Haynesville-rig-count-and-natural-gas-production1_zpsb1n95tiz.jpg

xo March 16, 2015 at 11:32 am

Ok, so using this Econbrowser calculator, I get about $2.75 at the pump at $75-$80/barrel:

http://econbrowser.com/archives/2014/06/gasoline-price-calculator

Can you tell me if the following is a reasonable approximation of this new reality? Due to the near limitless supply of shale that can be pumped profitability at around $75-$80/barrel, it represents a ceiling for future US gas prices of about $2.75, no matter what the Saudis, Opec, Russia, Venezuela, Nigeria etc. do.

JBH March 16, 2015 at 1:35 pm

Crude breaks to a new low today. Once time had transpired and crude showed it could not break out of the 3-day range set immediately off the January bottom, that failure meant resolution would eventually be to the downside. This has now happened. The market will now establish a new range. And all markets will reset off this. Crude oil prices>energy pass-through>core inflation>overall inflation>eventual bottom in inflation as perceived by the Fed>fed funds rate>rest of yield curve. This resetting will be a multi-month process. The element of time needed for processes to play out in an economic system means an inflation bottom cannot now be perceived (confirmed) before the June FOMC meeting. The only way the Fed could hike in June without seeing the higher back-to-back PCE numbers needed to confirm a bottom is by abrogating on the inflation prong of their mandate. The market would punish that.

In the first link, the author states the gap between production and consumption has shrunk to the lowest level since last April. The data show otherwise. An error of this nature puts his entire argument in jeopardy. The care taken in writing a piece reflects on the author's mind and gives us information.

The globe hardly needs more inventory this calendar year. Hence, if production is above consumption then pressure on price will continue to be downward. The salient chart is EIA 2015 World Liquids Production and Consumption Forecast. If inventories were already in excess, and if production is greater than consumption, as is the case each month on the chart, why would price rise? Unless I am missing something, inventory increases (flows) each month drive the level of inventories to greater and greater excess, but for the insignificant increment needed for trend-inventory-growth. Hence the first author's main argument doesn't hold water.

This takes us to the Kopits' article. It is much more nuanced. Which makes any useful forecast more difficult to ferret out. Nonetheless, the thinking is quite useful as it gives us insight into various aspects that may otherwise remain hidden. Kopits' main thrust harkens back to the 1986 episode as a parallel to today. At that time, Kopits says, both production and consumption responded quickly to the huge drop in price. Not to split hairs, but I recently (Dec 22nd) looked at this episode and concluded an 8-month lag time. That seems longer than the Kopits article expects. Be that as it may, something else is vitally important. The world is quite different – different in two ways.

Today a new supply force is in the picture. For the horizon of its short life, US fracking and increasingly non-US fracking must now be reckoned with. With no blame here, estimates of the average global marginal cost are all over the place. But when all is said and done, the dynamically changing technology of fracking and its global spread will keep downward pressure on price. Equally important, the demand situation is different today. Hamilton estimated 45% of the drop in price last fall was due to global demand. In 1986, demand was stagnating because of high price. The price decline in 1986 was wholly due to tapering demand growth. The Saudi's finally had to relent and increase supply, otherwise Saudi revenue would have fallen to zero. But the prime initiating cause back then was dwindling demand in a market where price was being held artificially high by a cartel.

Today's episode has a different source on the demand side. That of stagnating global economic demand because the Chinese economy is (this is too harsh a word) imploding. The global locomotive has derailed. Oil demand is suffering from the deceleration of global growth that's radiated out from China. This is quite unlike 1986. So, things are going to play out differently as well. The deflationary pressures from China's inevitable and now-arrived slowdown press down on all prices everywhere. This is not going to go away overnight. At the same time, fracking presses down on price from the supply side. This is a one-two punch. Forget the monthly numbers. This is the big picture. It is layered over the very large template of conventional oil well depletion which works the other way on price. Nonetheless, this one-two punch is the marginal mover and promises to keep oil prices down for a very long time. Surely through 2016. As at a higher level of causation, the globe has entered a box canyon with walls of too much debt from which there is no escape. That debt grew since the 2008 crisis nowhere faster than in China. The unintended consequences have just now begun to reveal themselves.

Steven Kopits March 17, 2015 at 9:01 am

JBH –

I continue to believe that 1986 is the correct template. The data are supportive. For example, here's a piece from John Kemp.

http://bakken.com/news/id/234911/u-s-fuel-consumption-is-soaring-amid-cheaper-prices-kemp-2/

The quarterly data from 1986 show that Q2 was the big quarter, with OECD demand rising by nearly 5% in this quarter alone. I think we'll see something like that again. Obviously, 5% growth is not needed to rebalance the market. 1.2% growth would do it nicely. So we're not talking about a huge gap.

I don't know how you keep oil prices low once the market has rebalanced. You need at least sufficient price signals to turn around the NA rig count. We can debate the number. Pioneer, for example, seems happy at $70-80 WTI. Some claim lower prices. I personally don't think $70 WTI will stop the rot in onshore conventional and at the IOCs. At that price, shales will both have to grow rapidly to meet new demand, as well as displace existing supply. It's quite a challenge.

And then we have Whiting, a leading Bakken producer, which put itself up for auction in the middle of the biggest price downturn likely for a decade. Why would someone do that? If shale is effectively the entire source of incremental supply globally, then prices must be high enough to reward shale oil producers for dynamic production growth over the next twelve months. Why wouldn't the company seek to refinance debt or make a modest capital increase to provide interim liquidity? Why would management head for the doors? Makes you wonder about the underlying economics.

JBH March 18, 2015 at 9:21 am

Stephen:

1986 is the only template. So it attracts like a flame to moth. Yet the macro context is very different. Then there was a big three: Europe, US, Japan. Today there is a big four. China, the locomotive of this tepid recovery, is now derailed. You can get off on the wrong foot by not fully recognizing this. China was the straw that broke the oil camel's back. Nor is China's slowing transitory.

In '86, central banks had begun forcefully taking the dollar down. Though for different reasons, the direction is quite the opposite today. The US economy had a swift undercurrent coming off the '82 bottom. Because that recession was a true, healthy cleansing, the economy was poised for a long run ahead. Japan was a powerhouse. All these conditions (and more) are reversed today. Always dicey picking comparison starting points. That said, let me take the two oil peaks and look two years ahead. Sep '85 WTI at $30.81, fell to $11.59 by Jul 1986 and by Sep '87 had rebounded to $19.53. June 2014, oil at $105.79. We don't yet know the bottom. If it's not until a 62.4% drop as in '86, oil will go to $39.80. A proportionate rebound would then take it back to $67 in Jun 2016. The market is itching to take oil to $39. The market has a very long memory, and coincidentally $39 was the 2009 low. Within this 2-year horizon, the sharper the drop the bigger the rebound. If oil stops today at $42, it's less likely to get to $67. Momentum must never be denied.

Suppose it goes to $39 (which I judge is where it is going, if not further), now we can look at the comparisons. Year-over-year, world real GDP grew 3.4% in '86. The US 3.5%, EU 2.9%, Japan 2.8%. There was a hit to growth in '86 of ½ ppt. Then an equivalent rebound in '87. The oil dislocation was temporarily stunning.

Even more critical differences. The funds rate fell from 7.9% to 5.9% the first year, and averaged 6.6% in the second. The 10-year fell from 10.4% to 7.5%, and averaged 8% in the second. Today the funds rate is going up, and just maybe the 10-year will average 20 basis points lower in year two than where it was last June. The consensus actually expects it to average higher. US monetary policy is a headwind for global growth, and hence oil. Economic fundamentals were strong in '86 thanks to the recessionary cleanse of '82, and sensible policy including deregulation. The expansion was 3-years young when oil prices started collapsing, and the expansion ran 4 more years. Hence the bull market in stocks was real. The expansion was 5 years along this time when oil dropped. And today the stock market is at the cusp of being the 3rd largest bubble ever! World oil consumption rose 2.9% '86 over '85; US rose 3.5%. That in the context of tailwinds from monetary policy, the energy-intensive US economy benefiting from a falling dollar, and Japan ramping up to 4% growth in '87 and 7% in '88. Today there are only headwinds, and they are severe. Add to that the fracking boom on the supply side, no matter that it is being muzzled. (Depletion of conventional oil cuts the other way, of course.)

The biggest headwind is debt! In the '86 episode, debt was not far from optimal. This cushion allowed US credit to increase 14% in '86 and 10% in '87. Hence aggregate demand got a big boost, and hence so did oil demand. Today global debt is at an historic high. Far, far beyond optimal. Precisely why China is slowing, the eurozone is at stall speed, and Japan is and will not get anywhere. Nothing but stagnation until the debt ratio comes down. For comparison, US credit rose 1.9% last year and is on track for 2% this year. That's below nominal growth, precisely the opposite of the 1986:Q2 surge you refer to. On top of all this, financial fragility has to be reckoned in. Over the remaining course of the 2-year horizon, there is a non-zero probability the next – for there will be one – financial calamity may strike. This has to be factored into the oil analysis.

Global growth is a function of the dollar and global trade, exchange rate problems emerging markets are now having, wrenching change in the oil patch, monetary tightening in the US, QEs abroad that may have some minor positive effect during our horizon, asset markets across the globe in bubbles, and a level of debt that is highly constricting. These larger forces make vehicle mileage etc. minor players. Arguing from Texas as Kemp does is a classic mistake. It is narrow and monotonic. Not only that, the current Feb-over-Feb change he touts as his main argument is not much bigger percentage-wise than the prior one. The marginal impact on Texas motor fuel tax receipts of the drop in oil has hardly been a big one. And "as the economy strengthens" is contrary to what is happening. The flow of economic reports since September is showing the largest cumulative net negative since 2010. Q1 growth will be dismal. Nor do we know when this will turn up, as we have never been in a place like this before. Specifically, in (a) an artificial economy post-crisis with (b) China now decelerating. Though not well understood, the second derivative is always a dominant force. All this means $67 oil by June 2016 is unlikely.

Jeffrey J. Brown March 17, 2015 at 9:16 am

So Far, Saudi and Global Net Exports of Oil Peaked in 2005

A crucial point about Saudi Arabia that almost everyone overlooks is that Saudi net oil exports have been below their 2005 net export rate of 9.1 mbpd (total petroleum liquids + other liquids) for eight, almost certainly nine, straight years.

While it's possible that the Saudis chose to reduce their net exports after 2005, a more plausible scenario in my opinion is that they could not exceed their 2005 net export rate, at least without doing long term damaged to their reservoirs.

Global Tight/Shale Plays to the Rescue?

Regarding tight/shale play potential globally, a key question is whether wells like the Bakken Play, i.e., quickly declining wells with an average production rate of a little over 100 bpd and a median production rate of less than 100 bpd, will work in much higher operating cost areas around the world.

Also, one has to consider the quality of the liquids production from tight/shale plays.

What refiners want and need is generally 40 API gravity and lower crude oil (and when we ask for the price of oil, we get the price of 40 API and lower crude oil). The EIA's own data and projection show that it took about half the global (oil and gas) rig fleet to increase US 40 and lower API gravity crude oil production by just 0.5 mbpd from 2011 to 2014.

EIA chart showing actual and projected US liquids production by API gravity (light blue and lower on the chart is 40 API and lower):

AS March 17, 2015 at 1:59 pm

Jeffrey,
Any thoughts about Tuesday's WSJ article discussing Iranian oil production?

Steven Kopits March 18, 2015 at 8:30 am

On the upside, there are two wildcards today, that is, Iran and Libya.

A deal with Iran could bring an additional 1 mbpd onto the market, substantially depressing prices for as much as six months, I would guess. But timing and certainty are hard to predict.

Big demand numbers coming out of India and Europe, by the way.

Darren March 16, 2015 at 10:36 pm

California (Bay Area) is still $3.25/gallon at the pump. California gets mostly Brent prices, not WTI, but still. Cheap oil has not made gas prices much lower in the Bay Area.

Benamery21 March 18, 2015 at 1:53 am

That isn't about crude price:
http://www.sfchronicle.com/business/article/End-of-refinery-labor-strike-could-mean-cheaper-6133179.php

Jeffrey J. Brown March 19, 2015 at 6:27 am

As Steven noted, many things are possible, but it's worthwhile reviewing some previous scenarios regarding Brazil & Iraq.

Circa 2009, the Iraqi Oil Ministry claimed that Iraq could hit 12 mbpd of production within about seven years, and following is a graph prepared by Stuart Staniford, showing a simple extrapolation that would put Iraq's oil production at 12 mbpd by 2016. In 2014, based on the projection, they would be at about 9.6 mbpd.

Iraq's actual production in 2014 was probably about 3.3 mbpd (total petroleum liquids).

http://3.bp.blogspot.com/_D9-JNTtRKgs/S0AwzBBUVqI/AAAAAAAAAMg/I9C6ykZfByY/s1600-h/Picture%20117.png

And following is an April, 2009 Bloomberg column talking about Brazil's projected rising oil production "Taking market share away from OPEC." In reality, Brazil is a net oil importer, with a recent track record of increasing net imports, even if we count biofuels as production. In 2009, Brazil's production was basically equal to production, but by 2013 their net imports had increased to 0.4 mbpd.

Iraq's net exports increased from 1.8 mbpd in 2009 to 2.3 mbpd in 2013 (total petroleum liquids + other liquids, EIA). So, the combined increase in net exports from Brazil + Iraq from 2009 to 2013 pretty much rounds to zero (0.1 mbpd).

Also, in regard to the April, 2009 Bloomberg column and the following quote from said column, "As OPEC nations make their biggest oil production cuts on record, Brazil, Russia and the U.S. are pumping more, threatening to send crude back below $50 a barrel as demand slows," monthly Brent crude oil prices were then in the process of rising at 43%/year, from December, 2008 to February, 2011.

April, 2009: OPEC Cuts Thwarted as Brazil, Russia Grab U.S. Market
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aiSCDyK4CWmI&refer=news

April 14 (Bloomberg) - As OPEC nations make their biggest oil production cuts on record, Brazil, Russia and the U.S. are pumping more, threatening to send crude back below $50 a barrel as demand slows. U.S. imports from the Organization of Petroleum Exporting Countries fell 818,000 barrels a day, or 14 percent, to 5.02 million in January from a year earlier, according to the latest monthly report from the Energy Department. At the same time, imports from Brazil more than doubled to 397,000 and Russia's increased almost 10-fold to 157,000, a trend that continued in February and March, according to data from each country. . .

Petroleo Brasileiro SA, the state-controlled energy company, said in January that it plans to invest $174.4 billion through 2013 to boost production oil and gas production to the equivalent of 4.63 million barrels a day by 2015 from 2.40 million in 2008.

[Jul 24, 2015] The Eurasian Big Bang How China & Russia Are Running Rings Around Washington

Zero Hedge

And don't forget Iran. In early 2016, once economic sanctions are fully lifted, it is expected to join the SCO, turning it into a G9. As its foreign minister, Javad Zarif, made clear recently to Russia's Channel 1 television, Tehran considers the two countries strategic partners. "Russia," he said, "has been the most important participant in Iran's nuclear program and it will continue under the current agreement to be Iran's major nuclear partner." The same will, he added, be true when it comes to "oil and gas cooperation," given the shared interest of those two energy-rich nations in "maintaining stability in global market prices."

philipat

Add also a pissed-off Saudi Arabia agreeing to China (It's largest customer) paying for oil in CNY much sooner than would otherwise have been the case. Then too the peoples of Europe are waking up to the fact that sanctions against Russia are unwarranted and are not in the best interests of Europe itself and that further tensions with Russia, created by the US, could result in nuclear war IN EUROPE whilst the US mainland would probably be unaffected,

So, all in all, yes a brilliant strategy by the neocons who seem to be living in the past....

ebworthen

The U.S.A. deserves to have rings run around it; we have been incredibly arrogant, and fomented war instead of heeding the instructions of our Founding Fathers and our Constitution (which has been trampled by those sworn to protect it).

[Jul 24, 2015]Peak Oil Review - July 23

"...More than $22 billion of the $235 billion of the debt owed by 62 North American oil companies, however, is "distressed" and unlikely to be paid back."
Jul 23, 2015 | resilience.org

As prices continue to fall, concerns are increasing on Wall Street as to the quality of their loans to unprofitable oil and gas companies. Many banks are starting to set aside money to cover bad loans which eat into banking industry profits. In recent years Wall Street has been the biggest ally of the "shale revolution" by allowing companies to exceed their debt limits time after time in hopes that they would someday turn profitable. With US oil prices now below $50 a barrel and unlikely to climb significantly during the next year or so, bankers are demanding that drillers reduce their credit lines and increase equity. In response US oil producers have raised some $44 billion by selling bonds and shares in the first half of this year. More than $22 billion of the $235 billion of the debt owed by 62 North American oil companies, however, is "distressed" and unlikely to be paid back.

The recent drop in oil prices is giving Moscow second thoughts about the economic recovery in 2016 that President Putin has been talking about. Russia will face recession or stagnation if oil trades near $50 a barrel next year. If oil is trading near $40 a barrel, Moscow is facing a 7 percent decline in its GDP next year.

[Jul 24, 2015] The bottom of the market may still be ahead

"...The oil companies and service companies have already made deep spending cuts with substantial redundancies. Nevertheless, the momentum built in the last 5 years continues to feed through to higher production levels. Many companies will have been hoping for signs of a robust recovery in price by now, hanging tough to retain staff for when the upturn comes. I suspect that over the next 6 months we will see a second wave of cuts. Things are indeed already austere here in Aberdeen."
Jul 12, 2015 | Energy Matters
Posted on July 12, 2015 by Euan Mearns

I have become an avid reader of the International Energy Agency Oil Market Report. A "free" synopsis is published mid month with the full report and data tables made public at the end of the month. Here are the bullets from the report summary published on 10th July:

The title of this post, "The bottom of the market may still be ahead", is the last line of the July IEA OMR summary. Those companies and investors hoping for an early end to this low price crisis may be disappointed. Global supply was up again in June by 550,000 bpd. Demand growth looks set to slow. Inventories are at record levels. And not surprisingly prices have once again yielded to the gravity of glut and have fallen below $60 / bbl. To add insult to injury US oil rig count has risen these last two weeks and UK North Sea oil production looks set to rise in the years ahead.

Rig Count

The US oil rig count has fallen every week since December 2014, that is until two weeks ago when it rose for the first time in 7 months a feat repeated last Friday.

The US oil rig count has risen over the last two weeks by a total of 17 units. So what is going on? Why have the shale producers not all gone bankrupt as some industry watchers forecast. An interesting article in Breitbart, posted by Roger Andrews in this week's Blowout, gives some clues.

The U.S. "fully burdened exploration and production "break-even" cost is now $51 per barrel, and falling fast. Furthermore, with hundreds of American oil companies having already paid the exploration lease acquisition costs to accumulate tens of thousands of drilling sites, the production-only break-even cost for positive cash-flow is about $29 a barrel. After tacking on a 9 percent profit, U.S. domestic oil companies are now incentivized to produce domestic oil any time the price is above $32 a barrel.

The operating cost base for drilling and producing shale oil has followed the oil price down. If these figures from Breitbart are anywhere close to correct then many OPEC members should be extremely concerned. Can they run their social services on $30 per barrel?

UK Oil Production to Increase

Not only do the oil companies and the oil price have to contend with robust US production but there is a prospect of UK oil production increasing for the first time since the year 2000. The forecast scenario below is from Derek Louden who provides a tremendous overview of UK oil production in this presentation.

UK oil production has a historic decline rate of about 9% per annum. It was always the case that when production declined so far that it would become easier to reverse basin decline. For example, when production stood at 2.9 Mbpd, 261,000 bpd new production capacity was required every year to replace declines. Now that production is closer to 0.8 Mbpd, 72,000 bpd new capacity will do the job.

The record high price of recent years has led to record levels of investment that are only now working through the system with several major new field developments due to come on line in the next couple of years. Derek Louden lists all new developments on pages 42 and 43 of his report. The big ones are: Schiehallion redevelopment, Clair phase 2, Kraken and Mariner. If all goes according to plan then UK production will rise before falling again before the end of the decade.

Oil Stocks

One of the big surprises of the IEA OMR is the record crude oil and products inventory levels that they do not fully understand. In the past I have never managed to make much sense of inventory changes and it is hence a variable that I have not followed. It is perhaps time to put that right. The chart shows the development of stock levels in the USA based on EIA data.

In a recent comment Jim suggested that the flood of LTO may produce a flood of propane and NGL that currently has no where to go but storage. In the USA this does seem to be a part of but not the whole story. It is a rise in crude oil stocks that underpins the recent surge in US inventory.

Concluding Thoughts

The oil companies and service companies have already made deep spending cuts with substantial redundancies. Nevertheless, the momentum built in the last 5 years continues to feed through to higher production levels. Many companies will have been hoping for signs of a robust recovery in price by now, hanging tough to retain staff for when the upturn comes. I suspect that over the next 6 months we will see a second wave of cuts. Things are indeed already austere here in Aberdeen.

One thing we seem to have heard little about so far is austerity within OPEC. There seemed to be solidarity for the current strategy at their June meeting. I wonder how much longer this will last?

[Jul 23, 2015] Western businesses eye Iran after UN backs nuclear deal

"Unfortunately for Iran, the timing could not be worse. Oil prices are depressed and already there is a glut of oil on the market. Adding Iran's crude will put further downward pressure on oil prices." -- May be that was the idea form the very beginning ;-)
Jul 23, 2015 | The Guardian

Handjani also said it was likely that Iran would soon be able to sell crude. "I think that is where we will see the most immediate loosening up of restrictions," Handjani said. "Iran has between 40m and 50m barrels of crude at sea. Expect this crude to come to the market in short order. They will start competing fiercely to regain market share that they have lost to their Persian Gulf neighbours. Unfortunately for Iran, the timing could not be worse. Oil prices are depressed and already there is a glut of oil on the market. Adding Iran's crude will put further downward pressure on oil prices."

[Jul 21, 2015] Is The US Shale Industry About To Run Out Of Lifelines

"...Each time, the shale driller came close to violating debt limits set by its lenders, endangering a credit line that provided as much as $1.05 billion in much-needed cash. Each time, Halcon's banks, led by JPMorgan Chase & Co. and Wells Fargo & Co., loosened their restrictions, allowing Halcon to keep borrowing."
"...When the Iran effect hits (by design), perhaps one the triggers in months upcoming, things will "fall" into place (edit: meaning oil slides further and further...GOD will have one very stumpy leg come September...)..."
"...Chesapeake is just an obvious turd floating on top. I live in oil country and I've got bets with friends on exactly which crash first, but I lost on Chesapeake since I figured they'd go down months ago....."
"...Shale plays are going belly up like no one is considering and the banks over sold their junk bonds at high premiums"
Jul 21, 2015 | Zero Hedge

Earlier today, Chesapeake Energy - in a mad scramble to conserve cash - eliminated its common dividend, a move which i) will save the company around $240 million per year, but ii) caused the stock to plunge to a twelve-year low.

... ... ...

Meanwhile, as we quipped earlier this month, drillers are about to be "zero hedged" as the price protection which accounted for 15% of Q1 revenue for around half of North American E&P companies (and which also helped keep bank credit lines open), rolls off.

Because the next round of revolver raids for the industry isn't due until October, investors may have been lulled to sleep by exactly the kind of credit facilities Chesapeake cites as contributing to its "extremely strong" liquidity position. In short, banks are about to run out of patience with this industry. Bloomberg has more:

Halcon Resources Corp. almost ran into trouble with its banks in June 2013. And again in March 2014. And in February 2015.

Each time, the shale driller came close to violating debt limits set by its lenders, endangering a credit line that provided as much as $1.05 billion in much-needed cash. Each time, Halcon's banks, led by JPMorgan Chase & Co. and Wells Fargo & Co., loosened their restrictions, allowing Halcon to keep borrowing.

That kind of patience may be coming to an end. Bank regulators have issued warnings on the risks involved in lending to U.S. drillers, threatening a cash crunch in an industry that's more dependent than ever on other people's money. Wall Street has been one of the biggest allies of the shale revolution, bankrolling thousands of wells from Texas to North Dakota. The question is how that will change with oil prices down by half since last year to about $50 a barrel.

"Lenders in general are increasing pressure on oil companies either to raise more equity or do some sort of transaction to pay down their credit lines and free up extra cash," said Jimmy Vallee, a partner in the energy mergers and acquisitions practice at law firm Paul Hastings LLP in Houston.

Banks are already preparing for the next reevaluation of oil and gas credit lines, reviews which typically take place twice a year in April and October. The loans are based on the value of drillers' producing reserves, which has shrunk as oil prices fell. Many companies are also losing protection as hedges that locked in prices as high as $90 a barrel begin to expire.

"There's another redetermination cycle in the fall," Marianne Lake, chief financial officer at JPMorgan in New York, said July 14 during a conference call to discuss the company's earnings. "And I'm not going to say likely but it's possible we'll be selectively downgrading some clients."

Banks so far have been willing to keep the money flowing because drillers that come close to maxing out their credit lines have paid them off by tapping public markets. U.S. producers have raised about $44 billion through bonds and share sales in the first half of this year, the most since 2007, according to data compiled by Bloomberg and UBS Group AG.

Oh regional Indian

Shale and all it's derivative FIRE related activities have not even felt the Iran effect yet, which is building, multi-billion dollar projects flying off the shelf, 21 nuclear reactors (dumbfucks).....

When the Iran effect hits (by design), perhaps one the triggers in months upcoming, things will "fall" into place. (edit: meaning oil slides further and further...GOD will have one very stumpy leg come september...)...

One way or the other, the march to Agenda 21 will not be denied except by a deux ex machina...

Meanwhile, we need to wake the fup....

https://aadivaahan.wordpress.com/2013/01/20/two-hammer-blows-and-a-rando...

KnuckleDragger-X

Chesapeake is just an obvious turd floating on top. I live in oil country and I've got bets with friends on exactly which crash first, but I lost on Chesapeake since I figured they'd go down months ago.....

youngman

I think this is a 5 year playout....its going to be tough going for 5 years but by then oil and gas will be back as a profitable investment game...

Soul Glow

^^ This is what will crash the markets. Shale plays are going belly up like no one is considering and the banks over sold their junk bonds at high premiums. 2008 MBS all over again.

[Jul 19, 2015] Shell Warns, Oil Price Recovery To Take 5 Years

"...The price of oil has fallen from more than $100 per barrel in June 2014 to under $60 today, and Brown said the company has believed for months that it will take until 2020 for the price to rise to a mere $90 per barrel."
"...It will take several years [for oil prices to recover fully], but we do believe fundamentals will return"
Jul 19, 2015 | Zero Hedge
Submitted by Andy Tully via OilPrice.com,

Ben van Beurden, the CEO of Royal Dutch Shell, and one of his senior executives envision low oil prices for some time unless energy producers cut production and the demand for fuel doesn't rebound.

In a wide-ranging interview with Oil & Gas Technology published July 14, van Beurden spoke of competing benefits of the low price of oil for fuel demand, and its liabilities for those who produce it.

"Low prices have big implications for exporting countries like Iran, Russia and Venezuela," he said.

"But also for shale-producers in the U.S., and even the domestic budgets of producers in the Gulf states. In consuming nations, low oil prices are an economic boon stimulating growth and demand."

For the near term, van Beurden pointed to one key forecast that this year will see more worldwide demand than in 2014. "Compared to last year, the International Monetary Fund expects the global economy to grow [in 2015]," he said. "So global oil demand is expected to grow as well."

But he stressed that many oil producers also are reluctant to explore and drill for oil because of smaller profit margins. Therefore, he said, "Supply … may even decline." As for Shell itself, though, he said, "We're determined to avoid a start-stop approach to investment."

As for the global market, Van Beurden said that at best, "a rapid recovery could occur if projects are postponed or even canceled. This would lead to less new supply – not so much now, but in two or three years. Combined with economic growth, the market could tighten quickly in this scenario."

But he pointed to one major snag in that view: U.S. shale oil. A boom in North American production over the past few years helped to create the glut that led to the steep decline in oil prices that began a year ago. OPEC, under the leadership of Saudi Arabia, decided to fight shale producers with a price war, hoping that keeping prices low would make shale extraction, already costly, unprofitable.

But if shale producers cut costs and take other steps to keep producing, van Beurden said, "With moderate economic growth, prices could stay low for longer."

Van Beurden qualified his outlook by stressing that "I can't predict the future," but his director of oil and gas production outside America gave a more specific view of Shell's expectations in a separate interview with Reuters, published July 16.

Andy Brown, a top Shell official, said the Anglo-Dutch oil giant forecasts no quick rebound in the average global price of oil, but only a gradual recovery lasting five years. He attributed this sluggishness to a slowdown in China's economy, leading a drop in demand for fuel, and the continuing oversupply of oil.

The price of oil has fallen from more than $100 per barrel in June 2014 to under $60 today, and Brown said the company has believed for months that it will take until 2020 for the price to rise to a mere $90 per barrel.

In fact, he said, that was a key driver for Shell to offer of $70 billion to buy rival BG Group more than three months ago. This not only supports van Beurden's insistence that low oil prices won't cause Shell to trim investments, but also expands Shell's capabilities in deepwater oil production and gives it immediate entree to markets for liquid natural gas (LNG).

"It will take several years [for oil prices to recover fully], but we do believe fundamentals will return," Brown said. "Until such time, we, like other companies, will have to make sure we stay robust."

[May 27, 2015] Crude Story by Arthur Herman

"..."I expect the United States will be exporting close to 300,000 barrels a day of processed condensate by the end of 2015", says energy analyst Andrew Lipow, president of the consulting firm that bears his name. That's still just a fraction of the oil exported by Saudi Arabia, or even Venezuela. But it could become a flood if Congress acts to lift the 1975 ban altogether. "
"...Two years after the economic trauma caused in part by the Arab oil embargo of 1973–74, Congress passed the Energy Policy and Conservation Act, or EPCA. It directed President Gerald Ford "to promulgate a rule prohibiting the export of crude oil" produced in the United States. "
"...Between 2007 and 2012 fracking sparked an 18-fold increase in U.S. production of high-quality crude oil known as light tight oil, or LTO."
May 26, 2015 | The American Interest
From the July/August Issue

The United States should export energy in the form of oil to allies and leverage a new American petro-diplomacy against adversaries.

America's energy security faces a strange paradox. On the one hand, we are the only leading industrial nation that prohibits crude oil exports. On the other, foreign tankers regularly line up at the dock in Galveston, Texas, to take on what is not supposed to leave the country, namely, crude oil-almost half a million barrels to South Korea alone last September and October.

The paradox is explained by the fact that this exported oil is ultra-light condensate from natural gas extraction, which the Commerce Department has decided is not crude oil as defined under the law Congress passed back in 1975 to ban oil exports. That technical loophole has allowed U.S. producers to export so much condensate that we are now shipping more oil than we did in the record year of 1957-more than 400,000 barrels a day, much of it condensate.1 "I expect the United States will be exporting close to 300,000 barrels a day of processed condensate by the end of 2015", says energy analyst Andrew Lipow, president of the consulting firm that bears his name. That's still just a fraction of the oil exported by Saudi Arabia, or even Venezuela. But it could become a flood if Congress acts to lift the 1975 ban altogether.

The explosive growth of available condensate reflects the key new factor in America's energy equation, namely the widely discussed shale revolution. Since 2008 America has been producing record amounts of shale natural gas in addition to shale oil-more oil, in fact, than the current market can absorb. The result is that we are now almost literally awash in oil that we can't ship abroad because of a law built around erroneous 1970s-era assumptions about "peak oil", which kindled expectations of looming oil shortages and dwindling supply.

For these reasons most experts, and a growing number of politicians, agree that the paradox of America's current oil exports is passing into the realm of absurdity. But the question of whether to lift the ban or preserve it has set off a major debate on Capitol Hill pitting free marketers against those who fear that ending the ban will drain away our hard-won national energy independence.

Unfortunately, the debate tends to get stuck on conflicting economic priorities when the real issue should be strategy, and when the real question should be not whether to lift the 1975 oil export ban, but how. Other oil-exporting countries use the commodity to further their national interests, and there is no reason the United States should not do the same. Without violating free-market principles, we can turn our energy superpower status into strategic advantage to help friends and gain leverage over enemies, and thus to restore American leadership around the globe.

Two years after the economic trauma caused in part by the Arab oil embargo of 1973–74, Congress passed the Energy Policy and Conservation Act, or EPCA. It directed President Gerald Ford "to promulgate a rule prohibiting the export of crude oil" produced in the United States. At the time it seemed a sensible if somewhat drastic response to a massive rise in the price of oil and to a domestic oil industry that was nearly overwhelmed by growing demand (this was before completion of the Alaska Pipeline). It also conformed to historical precedent: Congress and the Ford Administration knew that the Eisenhower Administration had decided in 1957 that it was cheaper and strategically wiser to buy what was then very inexpensive oil abroad and keep domestic oil in the ground as a strategic asset. In 1975, the United States believed it had to keep every drop of oil it pumped-especially when U.S. oil production was tumbling below ten million barrels a day, with no end to the fall-off in sight. Indeed, even with the Alaska Prudhoe Bay fields, domestic oil production dropped to just over five million bpd by 2000, a fourth of daily domestic consumption.

Then the shale revolution happened, otherwise known as hydraulic fracturing, or fracking. Between 2007 and 2012 fracking sparked an 18-fold increase in U.S. production of high-quality crude oil known as light tight oil, or LTO. U.S. crude oil production is now headed back to ten million barrels a day, even as domestic demand first declined and then flat-lined. The result is more oil than we can refine at home, as producers struggle to find ways to get around the 1975 export ban through regulatory waivers like the one for condensate.

Light tight oil (LTO) is a lighter crude, meaning that it is less viscous and "sweeter", which in petrospeak means it contains less sulfur, making it easier and less expensive to refine. It's a product much in demand among refineries in Asia and Europe. Meanwhile, refineries in this country are largely designed for handling the heavier crude that comes from Mexico, Canada, and South America. America's heavy crude refiners can process LTO but only with a significant loss of efficiency, which means they demand a considerable discount from producers. The point here is that LTO is an oil virtually made for export rather than for domestic U.S. consumption. LTO is an oil virtually made for export rather than for domestic U.S. consumption.

That's one reason why Senator Lisa Murkowski of Alaska has recently introduced a bill, S.1312, that lifts the ban on crude oil and which has found no less than eleven co-sponsors, including six committee chairmen. Not surprisingly, the American Petroleum Institute has been strongly supportive, predicting that an expanded export market would generate another half million barrels of oil a day to meet global demand and directly and indirectly create as many as 300,000 jobs.

Proponents of lifting the ban have included President Obama's own Secretary of Energy Ernest Moniz, his former Director of National Economic Council Lawrence Summers, and his former Undersecretary of Defense for Policy Michèle Flournoy. Still, resistance has been fierce, thanks to the efforts of an unusual coalition of environmentalists, oil refiners, and protectionist-minded nationalists who worry that lifting the ban will both drive up gas prices and dissipate our shale energy edge.

"As oil producers head overseas to fetch higher prices than they [can] get at home", says Tyler Slocum, director of Public Citizen's Energy Program, "domestic supplies will dry up, and the cost will rise." This argument seems compelling from a strict supply-demand perspective, but it ignores the fact that the oil market is integrated globally. Sending crude outside the United States will therefore add to global supply and push global prices downward. A host of studies, including by both the Houston-based energy research firm IHS Cambridge Associates and by NERA Economic Consulting for the Brookings Institution, suggest that U.S. oil exports will not raise gasoline prices but lower them.

More specifically, NERA estimates that even if the U.S. producers exported as much as two million barrels a day-roughly one quarter of current production - the price plunge might be as much as $5–7 per barrel in the first year, with further price declines following over the next decade. The report concludes that the price drop at the pump would be in the 8-12 cents per gallon zone, even if the decline in supply of LTO for domestic production means a growing convergence of West Texas Intermediate and Brent crude prices.

This touches on the heart of the resistance from refiners. Because domestic refiners don't relish their product, LTO producers have had to sell at a discount, sometimes as much as $28 below world prices. Ending the ban means ending the discount-which is in effect a non-market subsidy provided by the 1975 law-that allows refiners to buy LTO cheaply and sell it as gasoline on the world market. (Unlike crude oil, there are no restrictions on exporting gasoline.) This is such a lucrative market distortion that even during the third quarter of 2014, when oil prices were steadily tumbling, refiners still enjoyed a considerable premium based on the price differentiated between the crude oil they bought from U.S. producers and the refined products they sold, including abroad. The NERA experts conclude that the net effect of exports will be to introduce "greater efficiency in the refining system due to the increased ability of U.S. refineries to utilize the types of crude oil for which their design is optimized"-that is, the heavier crudes from U.S. producers and from Canada and other countries.

The third and final argument against lifting the 1975 ban is a macroeconomic one, namely, that the energy abundance the shale revolution has produced will dissipate if our surplus is shipped abroad. Related to this argument is the fear that, if oil prices retain their historic volatility, the American consumer could be caught in a vise if prices spike while U.S. producers are exporting too much of the shale supply. On the other hand, a steep drop in prices will induce a cutback in new shale exploration and production, undercutting our abundance at its very source. To support their claim, oil-export critics point to the impact of the recent drop in the price of oil on new shale investment, especially by smaller and mid-size producers.

This pessimistic scenario overlooks the fact that shale extraction technology has enabled producers to adopt a much more flexible response to price changes than conventional producers, enabling them to reduce production quickly when prices fall and resume with similar speed when prices rise again. The overall impact has been to provide a new stability to global oil prices, even as other technologies are allowing more efficient production from existing wells. Indeed, oil analyst Rusty Braziel has recently reasoned that even at $35 a barrel, increased drilling efficiency, falling production costs, and heavier reliance on the most productive oil areas will mean sustained production for a large proportion of U.S. shale producers. "I just don't see a way that the brakes are going to be slammed on", adds David Knapp of Energy Intelligence.

... ... ....

Which countries would make suitable candidates for such bilateral oil trade deals? One is certainly Japan. It's the third largest petroleum consumer in the world, and the second biggest net importer. It's also the fourth-largest supplier of goods to the United States, from cars and machinery to electronics and medical instruments, worth a total of $73 billion in 2013. Today Japan is almost entirely dependent on imported oil, 83 percent of it from the Middle East, and a third of that from Saudi Arabia. U.S. light crude would be welcome to Japanese refiners, and also allow them to reduce dependence on an increasingly volatile Middle East.

Indeed, Japan is one of the Asian countries that has already lined up at the condensate window (another is South Korea). In October 2014 almost 300,000 barrels worth of condensate were shipped to Japan's Cosmo Oil Company, while Houston-based Enterprise held term contracts with Japanese traders Mitsui & Co. and Mitsubishi Corporation to supply condensate through the end of 2014. Japan is also looking for alternatives to its dependence on Middle Eastern oil. Barring a breakthrough on the American market, it's been turning in desperation to Russia and buying East Siberian oil on the spot market to the tune of 300,000 barrels per day. A bilateral trade deal with the United States could all but erase Japan's need for Russian oil, delivering a sharp rebuff to Vladimir Putin's growing energy-supply extortion racket in Asia.

Another candidate is India. Its crude oil bill came to $144 billion in 2013, the single biggest of India's import costs. Indeed, 75 percent of its oil needs are imported, almost all from Gulf states, including Iran. Just as Japan wants to reduce its dependence on Saudi oil, India is keen to reduce its dependence on Iranian oil.Just as Japan wants to reduce its dependence on Saudi oil, India is keen to reduce its dependence on Iranian oil. A U.S. trade deal could go a long way toward doing that, while having an important impact on the U.S. trade deficit with India, now at about $20 billion per year. A putative deal of 300,000 barrels per day at $50 per barrel would lop off one-quarter of that deficit-not to mention other trade benefits the United States could negotiate as part of the final deal.

Then there is Australia, perhaps the most acute case of an oil-poor ally. Once an oil producer, Australia now imports 91 percent of its petroleum needs-up from 60 percent in 2000. A recent government study concluded that, if that vital flow of oil were interrupted, the country's transportation system would run dry in just three weeks. Australia's main sources of imported oil are Vietnam, Malaysia, and Indonesia. A 300,000 barrel-per-day deal with the United States would provide much-needed relief on the supply side and also breathe new life into Australia's stumbling refining industry (in 2014 almost one third of the countries' refineries were set to close).

Finally, there's Great Britain. This is ironic, since its North Sea oil discoveries in the 1970s produced the Brent crude that still gives the name to the light sweet oil that dominates world financial markets. Yet those North Sea reserves are on the wane. Production there has dropped to less than one million barrels per day; Britain now imports almost half its fossil fuels from abroad, including crude oil. Like other EU countries, Britain is increasingly dependent on oil from Libya, where a chaotic political situation regularly threatens to cut off supply. A generous and reliable stream of crude oil from U.S. producers, which is similar to Libya's light crude, could breathe new stability to Britain's economic fortunes and those of other EU countries as well.

Interestingly, the national security case for U.S. energy exports to the European Union has already been made and accepted-with regard to liquefied natural gas. The political battle over gas exports is virtually over, with the Obama Administration all but conceding defeat after initial opposition due to pressure from environmental groups. Creating a liquefied natural gas export infrastructure will take years, however-perhaps as much as a decade. Oil exports to the EU could begin tomorrow morning were the political will-and the right political strategy-in place.

A series of bilateral oil trade agreements would mark a new kind of diplomacy for the United States: petro-diplomacy. It would leverage our current energy advantage in not one but three ways.

The first and most obvious would be using oil exports to enhance the energy security of long-standing allies like Japan and Britain, as well as relatively new ones like India or, to choose another likely candidate, Poland. At the same time, it sends a powerful signal to the rest of the world that the days of the American oil embargo, as the Financial Times once dubbed it, are over.

The second is that it would turn oil into a commodity that enhances our terms of trade with other industrialized countries that want and need petroleum to sustain economic growth, and would do it without literally opening the floodgates. It could even turn the status of Most Favored Oil Export Nation into something worth trading in exchange for concessions on other traded commodities. South Korea, for example, currently buys considerable quantities of condensate but refuses to import American automobiles. A formal bilateral agreement could adjust that trade picture, while showing sustained "soft power" support for an important ally.

The third advantage of the petro-diplomacy approach is less obvious but just as crucial. America's reserves of shale oil are limited. Shale wells exhibit much steeper decline rates than conventional wells, which implies that the boom could fizzle out much sooner than optimistic forecasters believe. Even with a best-case scenario of discovering additional reserves through enhanced technology, there may be only a twenty-year window for American LTO production to have a decisive effect on global prices and supply.

This means that an outright lifting of the ban could quickly dissipate our current shale advantage, whereas a carefully modulated petro-diplomacy strategy would husband and exploit it. Of course, some will object that this approach borders on neo-mercantilism, thus overthrowing a sacrosanct principle of American diplomacy, namely promotion of free trade. Yet the sober truth is that the vast majority of bilateral "free trade agreements" are anything but; most contain loopholes for certain favored industries and products that remain protected by tariffs, import quotas, or other mechanisms. A real free-trade agreement need be only one page long; but there are no such agreements. Right now the United States has very little leverage for advancing freer trade on a bilateral basis. Oil trade deals with countries like South Korea or India could become among the most valuable levers we have.

... ... ...

[Mar 25, 2015] Iran Has a Little Surprise for Oil Market By Grant Smith

"The first wave to look out for when these sanctions are removed is that stored oil coming back into the market," Miswin Mahesh, an analyst at Barclays in London, said by e-mail on March 23. "Their ability to sell from storage will depend on whether shipping and insurance restrictions are also lifted."
Mar 25, 2015 | finance.yahoo.com

Lifting oil sanctions on Iran could hit global markets long before the nation starts pumping more crude.

That's because the OPEC member has been stockpiling oil onshore and in supertankers in the Persian Gulf, according to data compiled by Bloomberg. While estimates of the hoard by shipbrokers and government officials vary from as little as 7 million barrels to as much as 35 million, Barclays Plc and Societe Generale SA predict this crude would be first to be sold abroad if there's an agreement on Iran's nuclear program.

The U.S. and five other world powers are scheduled to resume talks with Iran this week, offering relief from sanctions on oil exports, shipping and financial transactions if the Islamic Republic curtails its nuclear program and allows inspections to verify compliance. If a deal is reached, the Persian Gulf nation could add its stockpiles into an oversupplied oil market where prices have fallen more than 50 percent since June.

"The first wave to look out for when these sanctions are removed is that stored oil coming back into the market," Miswin Mahesh, an analyst at Barclays in London, said by e-mail on March 23. "Their ability to sell from storage will depend on whether shipping and insurance restrictions are also lifted."

Buyers Reluctant

It would take three to six months after an end-of-June deadline on a final agreement for the Iranian oil to reach the market, according to U.S. government officials who asked not to be identified. The discussions this week are aimed at agreeing on a framework for the accord by the end of this month.

Iran has stored excess crude on tankers for the past 2 1/2 years as tougher restrictions on its oil sales deterred buyers, according to the International Energy Agency. The country exports about 1 million to 1.1 million barrels of crude per day, down from 2.5 million before the U.S. and European Union added oil sanctions in mid-2012, IEA data show.

"They'll probably start putting the oil onto the market immediately, once sanctions are lifted," Robin Mills, an analyst at Dubai-based Manaar Energy Consulting who worked with Royal Dutch Shell Plc in Iran into the middle of last decade, said by phone from Dubai March 22. "They're desperate for cash."

Iranian Tankers

Thirteen supertankers operated by the National Iranian Tanker Corp. were anchored offshore Bandar Abbas, Assaluyeh or Kharg Island in Iran from March 15 to March 18, according to data compiled by Bloomberg. The depth of their hulls in the water suggests the ships, which have spent from three weeks to nine months at their current positions, are laden with crude. Each vessel is able able to carry an average of 2.1 million barrels, the data show.

Four calls placed to National Iranian Oil Co. in Tehran by Bloomberg this week seeking comment went unanswered. Many offices are closed for the Iranian new year.

The amount of stored Iranian crude may be less than half the level indicated by the data compiled by Bloomberg, according to the U.S. officials. Iran has between 7 million and 17 million barrels at sea and on land, said the officials. They cited estimates based on satellite photographs and other evidence.

EA Gibson Shipbrokers Ltd. in London, which has been monitoring Iranian oil storage since 2009, estimates the country has 34.5 million barrels aboard tankers in the Persian Gulf.
Selling Crude
There would probably be a delay between the June completion of a deal and the sale of stored crude, said Mike Wittner, head of oil markets research at Societe Generale in New York. The stockpiles could be sold over a three-month period, swelling the current global market surplus by 30 percent, Barclays's Mahesh estimates.

While Iran's need for revenue may prompt it to sell some stored supplies immediately, the nation would constrain the rate of sales to avoid depressing global oil prices, Manaar's Mills said.

Brent futures rose $1.81 to $56.92 a barrel on the London-based ICE Futures Europe exchange at 2:13 p.m. New York time. The benchmark for more than half the world's crude has lost 47 percent over the past 12 months.

The disposal of stockpiled oil would still be speedier than the revival of Iran's oilfields. Restoring the country's output by 800,000 barrels a day to its full capacity of 3.6 million could be achieved in three months of sanctions ending, according to the Paris-based IEA, an adviser to 29 nations on energy policy.

Iran's Oil Minister Bijan Namdar Zanganeh said March 16 that the nation could increase exports by 1 million barrels a day within a few months of sanctions being removed.

Other analysts are less optimistic, with Citigroup Inc. estimating an increase of that size would take between six months and a year. A sustained expansion in Iranian production won't become a factor for the market until late 2015 or early 2016, Societe Generale's Wittner said by phone on March 23.

"Once the oil and banking sanctions are lifted or suspended, and they're allowed to put additional oil in the market, the first oil that's going to be sold is what's in storage," Wittner said.

To contact the reporters on this story: Grant Smith in London at gsmith52@bloomberg.net; Anthony DiPaola in Dubai at adipaola@bloomberg.net; Julian Lee in London at jlee1627@bloomberg.net

To contact the editors responsible for this story: Dan Stets at dstets@bloomberg.net; Alaric Nightingale at anightingal1@bloomberg.net James Herron, Rachel Graham

[Mar 20, 2015] Oil Prices Will Recover Market Fundamentals Are Working by Dan Steffens

Mar 19, 2015 | oilprice.com

There is no doubt in my mind that some of the "narrative" coming from Wall Street analysts is purposely meant to drive down the price of oil. More than 90% of the NYMEX futures contracts are now held by non-commercial "speculators". Many of them are now "short" oil, hoping the price of WTI will fall.

Once Wall Street gets oil prices as low as they can, they will suddenly change their tone and point out that demand for oil is going up and supplies are falling. I have seen this happen several times in my 35+ years in the industry. What's happening now is not new.

... ... ...

On March 13, the International Energy Agency (IEA) published their monthly Oil Market Report. It cause quite a stir on Friday the 13th and oil dropped more than $2.00/bbl. You can read the highlights of the report here: https://www.iea.org/oilmarketreport/omrpublic/

I thought the IEA report contained some rather bullish long-range forecasts, not the least of which is that the IEA believes global demand for refined products will increase 2.0 million barrels per day from where demand is today by the 4th quarter.

They believe low fuel prices will continue to increase global demand, pushing demand for refined products up over 95 million barrels per day by year-end. I think their estimates may prove to be quite conservative. A year after the last big drop in oil prices that occurred in 2008, demand for liquid fuels increased by 3.3 million barrels per day in 2009.

So, why are oil prices still so low?
  1. There is a lot of "FEAR" being generated by concerns over the rapidly rising amount of oil in storage. In my opinion, this is way over-blown.
  2. U.S. oil production continues to rise, despite the sharp drop in the active rig count.
  3. Seasonal and unplanned refinery outages have lowered demand for oil.
  4. Traders are worried that President Obama will agree to a deal with Iran and lift the sanctions that are keeping an estimated million barrels per day off the market.
  5. Strength of the U.S. dollar continues to weigh on commodity prices.

Let's take these issues one at a time.

Oil Storage: At the end of February, the EIA reported that working oil storage capacity in the U.S. was 40% empty. The most talked about storage location – Cushing, Oklahoma – still has about 20 million barrels of working capacity remaining.

As the tanks at Cushing approach capacity, the storage fees go up and oil will be directed elsewhere. There are many pipelines that take oil out of Cushing, so the oil is not "stranded" there. Oil will not start overflowing the tanks in central Oklahoma or anywhere else.

Related: The Truth About U.S. Crude Storage

It is very important to understand that the weekly EIA oil storage reports (published on Wednesdays) includes pipeline fill and field level storage. Although it is somewhat hazy, it is estimated that the U.S. oil pipeline system and upstream field tanks have approximately 120 million barrels of above ground oil in "storage". It is not included in the ~525 million barrels of commercial storage capacity that many analysts compare to the oil inventory number each week.

U.S. Production Growth: Investors are puzzled by the reports that U.S. production continues to rise while the number of rigs drilling for oil has dropped more than 45% in six months. The reason for this is simple; the drilling of new wells is not what increases production. It is the connection of those wells to a gathering system that adds production. The lag time from spudding a horizontal well to completing it to connecting the supply to a pipeline can be over six months. There was a large inventory of wells "waiting on completion" when all of this started back in June and it takes time to work through this inventory.

Several of the companies I follow are now saying they plan to drill wells and hold off on completing them until oil prices move higher. Although I agree with this strategy, it is impossible to estimate how much this will impact daily production rates. My guess is not very much.

U.S. onshore production should peak this summer and go on decline in the 3rd quarter. There are several Gulf of Mexico projects coming on-line this spring that will increase total U.S. production by approximately 200,000 barrels per day. Gulf of Mexico production is expected to peak at close to 1.7 million barrels per day (BOPD) in the first quarter of 2016, up from 1.4 million BOPD currently.

... ... ...

Strength of the U.S. Dollar: This is a real concern. The spike in the value of the dollar compared to a basket of other currencies can be viewed at: http://www.marketwatch.com/investing/index/dxy/charts

The dollar is up approximately 25% from where it traded during the 2nd quarter of 2014 and is responsible for at least $25/bbl of the drop in the price of WTI crude oil. Since oil trades in U.S. dollars, there is an inverse relationship between the dollar and the price of oil. This tops my list of "real" concerns when it comes to my long-term outlook for oil prices.

Conclusion: Your guess as to where oil prices are heading in the next few months is as good as mine. Even though there are plenty of places to store oil, the record high U.S. oil inventories will continue to give the bears support for lower price forecasts. In my opinion, we are nearing the mid-point of the bottoming process for oil. At the beginning of the year I predicted that oil would test the lows several times during February to May, and then begin to rise. I've seen nothing yet to change my opinion.

In the short-term, I am expecting energy investors to remain on the sidelines until they see U.S. production growth slow and demand increasing.

Dan Steffens for Oilprice.com

Jim on March 19 2015 said:

Unfortunately, demand likely won't spike but will succumb to a worldwide recession. The Chinese slowdown is real, as is the one in North America and Europe. Ditto Latin America.

The dynamics next year and in the medium term may firm up oil prices around $65 WTI/$75 Brent, but that new normal still will squeeze Russia, OPEC and Latin America with serious geo-political implications.

istvan peterman on March 19 2015 said:

"...Although it is somewhat hazy, it is estimated that the U.S. oil pipeline system and upstream field tanks have approximately 120 million barrels of above ground oil in "storage"..."

...the pipelines are empty, you pour the oil in and wait for it to come out on the other side - wrong; they are full and pressurized, you add at the entry point x barrels and remove at the endpoint x barrels - sorry they are not empty and available .

Kimball Kaleach on March 19 2015 said:

Dear Writer,

You've neglected one thing ... all of the production that has been shut down or tapered back will come back with a vengeance as soon as the break even price is reached.

And the break even price keeps going down because of continuous improvements. $100/bbl price is a pipe dream now - you be lucky to get past $75 on the best day, and that will be, for all intents and purposes, FOREVER. FOR - EV - ER.

nihal on March 20 2015 said:

Thank you for a very well written article explaining your view. I would like your take on the contango between the current month wti contract and the 1,2,3 month future contract. Its very high, I understand it reflects rising storage costs, but what would explain the extremeness of it.

How do you see it unfold ?