The Strategic Petroleum Reserve is America’s insurance against war with adversaries such as Iran. Now a potential deal between the two countries could end up creating an SPR-sized problem for oil bulls.
If sanctions on Iran are lifted quickly, the extra oil that could find its way to market by the end of 2016 could add up to an amount similar to the SPR’s roughly 691 million barrels.
There may yet be no deal with Iran come the end of June. But if there is, and sanctions are lifted, a big tap will open up in the global oil market. Iran’s output in 2008 was almost 3.9 million barrels a day; last year it was 2.8 million. This week, the U.S. Department of Energy speculated that, with a deal in place, Iran might start selling a stockpile of 30 million barrels or more later this year and raise its output by perhaps 700,000 barrels a day by the end of 2016.Like ObamaCare, a deal will be reached. Good, bad, or indifferent, President Obama will get the deal done.
Something tells me Saudi Arabia is watching this very, very closely.
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Nation's Largest Refinery Proposal
Reuters is reporting:
Sources have told Reuters Exxon wants a longer pact to avoid work stoppages if it expands the 344,600-barrel-per-day-capacity Beaumont refinery into the nation's largest, possibly reaching 850,000 bpd by the end of the decade.End of the decade? Only five years from now. Hillary Clinton will just be starting her second term as president.
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