An Iranian oil tanker, moored at the port of Assaluyeh for more than a year, set sail for South Korea last week, heralding a new period of uncertainty for world crude prices.
The global oil market, already suffering a supply glut, has been anticipating the arrival of Iranian crude for months, and now that sanctions against its nuclear program have been lifted, Iran is free to sell more of its oil into a market already oversupplied by 1.5 million barrels or more a day.
At the same time, neighboring Iraq promises to produce even more than its current 3.7 million to 3.8 million barrels a day, a recent record. Reports that Iraq could produce more than 4 million barrels a day weighed on energy prices Monday. West Texas Intermediate crude fell 5.8 percent to $30.34 per barrel.
Saudi Arabia, the world’s biggest exporter, has pledged to keep its approximately 10.2 million barrels a day of output steady — or even raise it — unless other producers agree to cut back, an unlikely outcome.
Other OPEC members in the Gulf, like Kuwait and the United Arab Emirates, have stood behind Saudi Arabia, which drove the more-than-year-old policy of letting the market set prices, rather than the cartel’s traditional tactic of attempting to control them with production levels.