If approved by all parties, the nuclear pact involving Iran, the U.S. and other world powers would enable Iran to restart its oil program and trade globally, further glutting the world market, Louisiana experts tell The Advertiser. That would delay any small rebound in oil prices by the end of year, and would send depression in oil prices further into 2016 and perhaps beyond.
“There would be no potential rebound in 2015,” says David Dismukes, executive director of the LSU Center for Energy Studies.
Prices would stay low, Dismukes says, while drilling would be delayed and oil service companies would remain in the doldrums a while longer.
“Iran might add 500,000 barrels a day to the world market within six months,” adds Don Briggs, president of Louisiana Oil & Gas Association. “Within a year, it could be a million.”
That’s a lot to bear for a global market already awash with oil.
“A half-million barrels (more) alone is not what the market needs,” Dismukes says. “Another million: The impact is huge.”
Oil & Energy Insider suggested Tuesday that Iran could produce 500,000 to a million barrels of oil a day within a year; Iranian officials say they are aiming for 2.3 million barrels a day.
Despite that news, the price per barrel of oil did not plunge Tuesday; experts say the price had eroded already the last two weeks. Brent Crude Oil sold at 57.85 Tuesday evening; West Texas Intermediate sold at $52.20. As of 9:30 a.m. today, Brent was selling for $57.84 a barrel, and WTI was selling for $52.44. At some point, Dismukes says, the price languishes.
“A glut is a glut,” he says.
