Iranian Oil Would Flow Slowly After Nuclear Deal

ran could flood the market with its crude stockpiles if it reaches a deal on its nuclear program, but its output would slow after the initial release, analyst Matt Smith said Tuesday.

Negotiators from Iran and six world powers are working to reach a Tuesday deadline on the country’s nuclear program. Crude futures first broke through their two-month trading range last week after an Iranian diplomat said technical experts had completed the draft of a deal.
That set off a nearly 8 percent slide in oil prices Monday, erasing much of the year’s gains.

With the market already oversupplied with 1.5 million to 2 million barrels a day, any sign of movement toward a nuclear deal will be bearish for oil markets, said Smith, director of commodity research at Clipper Data. Iran could release as much as 40 million barrels of oil currently sitting in floating storage into the market, he told CNBC’s “Squawk Box.”

However, once it releases that stockpile, Iran will go through a gradual process of returning about 200,000 barrels per day back into the market, he said “Even in a year’s time we may not see the return to presanction levels of [about] 3.6 million barrels per day.”

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza