As we’ve mentioned on No Filter Network before, the oil-game be lit right now.
The price of oil is at all-time lows after crashing nearly 70% over the past 18 months (we should note that oil has rebounded +10% relative to its price a couple weeks ago).
The unreal crash in the price of oil can be attributed to 2 main factors:
- Decreased global demand due to alternate energy sources (solar, wind)
- Sharp increase in global supply due to the emergence of new oil exporters and an unwillingness by major global producers to slow down their respective outputs.
FINALLY, some of the oil power-players are starting to discuss collaborative strategies to slow down the supply of oil. Saudi Arabia, Russia, Venezuela, and Qatar all agreed to freeze oil outputs at January levels (which ironically are at historical all-time highs). These are important discussions as they have the potential to slow down the economic bleeding that many oil-dependent countries are experiencing.
Iran and Iraq ain’t about that life, son.
Now, it may NOT be fair to group Iraq into the same category of Iran on this subject. While the Iraqi’s have resisted and signaled an overall disapproval of putting artificial caps on the output of oil, they haven’t closed the door on the subject. In fact, Iraq has stated that they’d be willing to cooperate in a supply-cap strategy if it involved “unified support” among all major oil producers. Basically, Iraq’s saying “blow me” to anyone that thinks that they’re going to fuck with their economic productivity if it means other producers have an unfair advantage (which they are right about). We’ll see if Iraq owns up to its promises if a “complete agreement” is ever reached.
As for our other subject: Iran ain’t hearing none of that noise.
Thanks to a ridiculously irresponsible Iranian Nuclear Agreement (99% sure that’s not actually the real name, by the way), Iran will experience an inflow of $150BN worth of unfrozen sanctioned assets. With the release of these sanctions, Iran will be free to sell oil just as they please.
After years of being economically-bent-over by sanctions, you think Iran is going to just put a cap on the amount of money they can rake in? NAHHHHHH SONNNNN. Iran ain’t about that life, bruh. Iran is finally financially free(er?) is going to try to stack that paper like nobody’s business. Iran finally got out of jail (sanctions lifted). Iran got the dope (natural resources). Iran finna hit the street corner hard (global oil importers).
With Iran unwilling to cooperate, Iraq will most likely continue to produce as they please. Which ultimately means the issue of global oil supply will continue to exist. It’ll be fun to see this one continue to play out.
And you know it boy.