Oil Price: According to senior political and economic sources who work closely with the current Iranian government exclusively spoken to by OilPrice.com last week, the U.S. has agreed to a tentative removal of key sanctions in the oil, gas, petrochemicals and automotive sectors, plus some of those on Iran’s banking sector.
However, Supreme Leader, Ali Khamenei, and the senior figures of the Islamic Revolutionary Guards Guard Corp (IRGC) are also demanding the additional removal of individuals and their businesses from the U.S.’s sanctions list. Although Khamenei (fully supported by the senior IRGC generals) has repeatedly stated that Iran will not – and legally is not required to – renegotiate any elements of the Joint Comprehensive Plan of Action (‘nuclear deal’) from which the U.S. unilaterally withdrew in May 2018, the Iran sources believe that they may yield on this intransigent stance.
“Tehran may be folding, with nationwide power outages and rising food shortages, rising inflation and depreciation of the rial raising the prospect of widespread civil unrest across the country,” one of the Iran sources said last week.
Despite the comments of many who have never traded anything in the financial markets (corroborated by those who have but who are talking up their own long crude positions) that there will be little effect on the oil price when at least 2.5 million barrels per day of Iranian crude oil returns to the market, this is highly unlikely to be the case.
The fact that global trading giant Goldman Sachs is still targeting Brent crude oil to hit US$80 per barrel at some point this year, however, is significant… Read More