The deal between Iran and the international community to prevent the Middle Eastern country from making nuclear weapons is significant for the oil markets in terms of long-term supplies which could see Iran pumping 1 million barrels a day by 2017. Energy Aspects’ Richard Mallinson says that Iran has big ambitions to increase its oil exports, but it will not happen overnight. ‘When you look at the state of Iran’s upstream, it has been starved of foreign investment for a couple of decades and it’s going to take a long time to bring those fields back up and increase production.’ President Obama said, ‘because of this deal, Iran will not produce the highly enriched uranium and weapons grade plutonium that form the raw materials necessary for a nuclear bomb.’ The president said the agreement with Iran would deny the Iranian government a path to nuclear weapons and require international inspections for compliance. ‘This deal is not built on trust,’ he said. ‘It is built on verification.’ The President also said he would veto any Congressional attempt to block the agreement. Mallinson said it’s likely to face some opposition from Congress because of the likely impact it could have on U.S. oil producers who will likely feel the biggest impact when Iran starts pumping more oil. Mallinson also said OPEC members Saudi Arabia and Iraq do not appear willing to trim oil output to make room for Iranian oil and that could increase competition, particularly in Asian countries. TheStreet’s Ruben Ramirez has details from New York.
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