How Will Lifting Iranian Sanctions Affect Price Of Oil?

Link here.

For 30-second sound bite, it looks like:

• we're talking about 1 - 2 million bopd embargoed
• the 1 - 2 million bopd is pretty much the increased amount that Saudi can provide
• even if US - Iran become a bit friendlier, the sanctions won't go away overnight
• once the sanctions are dialed back, Iran won't get new oil production to the market overnight

My hunch is that if US-Iran talks go well, the "risk" premium in the price of oil will be reduced, taking us back to about where we were before this all started, i.e., about $96.

NYMEX $91 to $99 is the sweet spot for Bakken operators from what I can see.

Over $100 can be a problem for hedges, derivatives for the Bakken operators.

Despite the price of oil continuing to fall in price today, all three US majors (CVX, COP, XOM) are all up today. As is the market. Barely.

I think share prices of oil companies will follow the stock market in general. As the price of oil goes down in an orderly fashion, the stock market -- all things being equal -- should rise.

I think the stock market will rise and fall based on global economy; political theater in Washington, DC; the US economy; and, easing of world tensions (we've already seen the latter).

Or stated another way: the shares of oil companies will follow the general market. The price of oil, as long as it rises or falls in an orderly manner, will have little long-term (> 6 months) effect on how shares in large- and mid-cap oil companies will do.

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