August 2015 EE
P. 1
Iran deal could open oil flood gate
Rig Count
21,500 COPIES
In a recent interview, both U.S. Sen. James Lankford (R) of Okla- homa and U.S. Rep. Frank Lucas (R) of Oklahoma said the sanctions
have worked.
But, Lankford speculated flooding
the market with oil won’t happen overnight. There may be a burst of oil at first, but then
a lull until production comes back. Turning lots of
production back on suddenly can be com- plicated.
“It’ll take a while for Iran to be able to
get up to speed.
I think they’re maxed out to capacity because
they’re short so many parts. The sanctions
have had a real effect on them
getting supplies and parts and everything else. But they’ve got millions of barrels parked off shore right now that they’ve actually put in ships and when the sanc- tions are lifted they’ll be able to sell that oil immediately. So, they’ll have a very rapid effect. Then I think the prices will come back up a little bit and while they take about six months to a year to get back
up to a more consis- tent, higher supply, but they’re doing half right now – about 1.1 million barrels a day.
“They were about 2.3 million barrels a day just six years ago. So they obviously have a great deal of capacity to be able to get back, but I think it’ll take
a little bit of time,” Lankford said.
Prior to 2012, oil exports provided half the Iranian govern- ment’s revenue and made up one-fifth of the country’s GDP.
Lucas agrees with Lankford that the oil sanctions on Iran have hurt them badly. He said Tehran desperately needs the money the deal would bring, but the real question is what will the country’s leadership do with the income?
“Where the Iranian economy should be now, it is half of what it should have been,” Lucas said. “So the economic embargo, their inability to officially sell crude oil into the world market has hurt them badly. So they
desperately want this. They need the cash revenue to address their problems at home. “The concern then becomes will the
Ayatollahs, the religious leaders who actually run the country, spend this new money on making the lives of the average Iranian better or will they spend it on acquiring atomic weapons or the capacity for more weapons and will they spend money supporting ter- roristic organizations around the world?
“Many of us fear based upon the track record that the leadership of Iran at this time will not spend their money on their citizens. They’ll spend their money on creating politi- cal and economic chaos around the world.” Lucas added, “Terror, I think, is a more precise way to call it.”
Lankford can’t support the nuclear deal brokered by the President. Not because it’s
a partisan issue. He said there are plenty of Democrats that don’t support it either.
“Not only for the energy issue. There are only two countries in the world that can’t sell oil in the world market, Iran and the United States. And for some odd reason, the President has spent the last year trying to allow Iran to sell their oil in the world market but we can’t still. That makes absolutely no sense to me.”
If it passes, Lucas knows the Iranian nuclear deal would affect much more than just oil prices.
“If the President manages to get his deal through Congress, how much more crude oil will come into the world market? How much pressure will that put on prices in places like Oklahoma and, consequently, what does that
(See VOTE, 2)
Paragon Communications News Director
One of the biggest
international deals in
recent memory is headed
for a showdown in Con-
gress next month as Iran,
the United States and its allies
push ahead with talks over a nuclear agreement that would change many things – perhaps none faster than the price of oil.
According to energy experts, any deal easing sanctions over the last several decades could eventually translate into half a mil- lion barrels or more a day in Iranian crude heading into a glutted global market. Some estimates are as high as 800,000 to a million barrels a day.
The U.S., United Nations and European Union have levied multiple sanctions on Iran for its nuclear program since the Interna- tional Atomic Energy Association (IAEA), the UN’s nuclear watchdog, realized that Iran was not compliant with
its international obliga-
tions. That was in 2005. In
1967, Iran acceded to the
Nonproliferation Treaty
promising to never become
a nuclear-armed state, but
in the 1970’s, that country’s
policies raised U.S. concerns
and in 1974, Iran signed a
safeguard agreement con-
senting to inspections.
The latest direct sanctions
on International purchases of
oil from Iran were enacted in
2012 as part of wide-ranging
economic sanctions aimed at
bringing Iran to the bargain-
ing table over its nuclear
program though leaders in its
capital, Tehran, say its program is peaceful. Oil exports out of Iran in recent years have been essentially capped by the sanctions aimed at pressuring Tehran over its nuclear ambitions.
If President Barack Obama’s negotiated nuclear deal is approved by the Congress, sanctions on oil exports out of Iran would
be lifted. With global crude prices already under pressure, the deal could quickly knock them lower.
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“‘If the President manages to get his deal through Congress, how much more crude oil will come into the world market?”
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