Iran - How much oil and when

[dan_s]

On Sunday, the Joint Comprehensive Plan of Action reached formal adoption, setting the stage
for Iran to begin modifying its nuclear facilities, a necessary step for international sanctions relief
once the IAEA certifies compliance. Given the likely 6-9 months it will take for Iran to meet its
nuclear obligations, the additional barrels will begin hitting the market in late Q2 2016. As a sign
of strength, Iran will likely try to push as many barrels as it can onto the market as soon as
possible; however, once it has worked through the approximately 36 mb of crude and
condensate in floating storage (initially boosting exports), export volumes should normalize
between 375 and 500 kb/d higher in late 2016, which we assume in our balance. Of course, the
price impact would be outsized if the Iranian volumes came in materially higher or lower than
our and industry consensus estimates. While the Iranian Oil Minister called for OPEC to curb
production to boost prices to $70/bbl or $80/bbl this past weekend, uncertainty over the
eventual size of the Iranian exports could complicate efforts to forge a consensus on a cut if the
cartel were actually prepared to abandon the market share strategy and return to defending a
floor.

NOTE: An estimated 70% of the oil Iran has in storage is heavy/sour. They will have trouble giving it away. This sour crude does not compete with Brent or WTI.

[dan_s]

Iran will be getting $150 Billion in cash soon. I expect a large part of that money will be spent to support their terrorist groups. Thousands more will be killed thanks to the Iranian Nuke Deal. Don't plan you next Middle East vacation anytime soon.

[dan_s]

Several members have already noticed my mistake in yesterday's Flash Alert where I said Iran was only getting $150 million. Yes, they are getting $150 Billion.