I haven’t followed the Iran Deal reporting nearly as closely as others, so it’s altogether possible I’m off base here.
But I found this Associated Press report, specifically not about the Iran Deal, kind of curious: Dubai, Saudi Markets Lose 7 Percent After Oil Price Dip. The title accurately describes the subject matter. Here’s the explanation for the oil price drop:
Oil futures have been falling for eight consecutive weeks because of ample supplies of crude and a slowing global economy. Prices have fallen almost 60 percent since this time last year.
Sherif Aziz, an analyst at Mubasher Trade, said there are also growing concerns about a slowdown in China, which announced a devaluation of its currency, the yuan. Concerns about slowing growth in the world’s second-largest economy shook markets around the world and drove the U.S. stock market to its biggest drop in nearly four years on Friday.
Eight consecutive weeks, huh? Where were we 8 weeks ago? Well, a deal had not yet been inked, but it was becoming clear that one was likely. And what would such a deal do to future oil supplies, with the lifting of sanctions on Iran?
Yet no mention of this by the Associated Press.
And that’s the thing. I’ve seen no reporting of the impact of the Iran deal on the oil markets, and the political implications that impact might have. I’m sure such reporting is out there and I likely could find something on the subject with a google search, but why is the reporting not more widespread?
I’m no expert on oil markets. Maybe there’s an explanation as to why the availability of Iran’s plentiful and relatively easy to extract oil onto the world market is a non-factor. But even if that were the case, wouldn’t the subject still be newsworthy?
Here’s what I find more troubling. The oil markets have a miraculous way of bouncing back. When that happens, will we get a partial explanation similar to the AP’s explanation for the price drop, leaving out the political ingredient?
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There really hasn’t been an impact of the the Iran deal on oil prices; they
re where they are now because there’s a glut on the market (thank’s to fracking in North America, in large part) and China’s slowing economy driving down demand. Iran’s entry into the market would depress oil prices some, but not a whole lot.
If anything the markets should be looking up at the passage of the deal; Iran is a large, mostly young consumer market with a hella pent-up demand for foreign goods.