Just what the oil and gas industry in Oklahoma didn’t need—the huge release of Iran’s oil reserves on the world market. The lifting of U.S. sanctions over the weekend as part of the Obama administration’s nuclear deal with Iran immediately prompted oil prices to drop below $28 a barrel.
Brent crude on Monday morning dropped to $27.67 a barrel, the lowest mark since 2003.
The oil price drop followed quickly as Iran released five Americans and the U.S. formally opened the door for Iran to begin selling its oil on the world market. Experts say the move allows Iran to produce another half a million barrels of oil a day.
“This means we will be seeing a bigger oil glut with Iranian crude exports coming back to the market,” said Daniel Ang, a Phillip Futures analyst in an interview with the BBC. Iran’s oil reserves are the fourth largest in the world. It’s believed Iran will add another million barrels a day of oil to the world markets, a move that will only cause the markets to fall even further.
The lifting of the sanctions came after the IAEA, the nuclear watchdog said Iran had complied with a deal designed to prevent the country from developing nuclear weapons. The Obama administration maintained the release of the five Americans held by Iran over the weekend was separate from the nuclear deal.
Still, the matter left an angry taste in Sen. Jim Inhofe’s mouth. While he celebrated the release of the Americans, he was critical of the Obama administration.
“While President Obama and Sec. Kerry say that this points to a safer world, they coult not be more wrong,” said the Senator in a statement from his Washington office. “Americans should be exasperated by the Obama administration’s new found trust in a country that has called for America’s destruction and that continues to be the leading state sponsor of terrorism.”
The Senator said Iran has repeatedly proven it cannot be trusted, especially after conducting the testing of medium range rockets within a mile of the U.S.S. Harry truman in the Strait of Hormuz.
“In the meantime, the Iran Deal is releasing billions of dollars to Iran through the easing of sanctions while failing to provide a sure method to monitor and verify all Iranian nuclear operations,” added Inhofe. “It also provided clemency to 7 Iranians who were accused or convicted of sanction violations, which provided Iran with key technology to improve their nuclear, ballistic missile and other military capabilities, and it removed 14 Iranians from an Interpol wanted list.”