Return to the oil market

　　Iran, as the world's top ten oil-producing countries and the world's fourth largest proven reserves of crude oil country, every move will have an impact on the global oil market. The current two main international crude oil market is the OPEC and the United States, even though nearly a year since the international oil prices continued to slump, OPEC crude oil does not always adhere to the policy cuts, while US shale oil industry is also still tenaciously to keep output steady. Now, with Iranian oil sanctions lifted, a huge amount of Iranian crude oil will again flock to the market, which will inevitably cause a huge impact on the international oil market.

　　In fact, the impact of Iran to return to the oil market has been initially reflected in the price of oil. July 14, international oil prices fell more than 2% intraday, while US West Texas crude oil prices have fallen 11 percent since July, had around $ 60 per barrel fell to $ 51.86 today. The figure below shows the international crude oil index K line chart in May to July, it can be seen from the figure, since the beginning of July, crude oil futures prices fell sharply, which reflects the market success for Iran nuclear talks expected.

　　Prior to June 2012, the United States and the European Union on Iran's oil and financial implementation of the new trade sanctions, Iran was a major oil exporting countries in Asia and Europe, in 2011, its crude oil exports to 2.6 million barrels per day. Between July 30, Iran's crude oil exports to Asia and Europe have decreased to 600,000 barrels per day. Although the July 14 Group reached between Iran and the six countries on the Iranian nuclear control and sanctions lifted problems consensus, but peace talks content and specific implementation of the program is awaiting approval from the US Congress and the Iranian parliament, the complete lifting of the ban is expected to be implemented in early 2016 . Therefore, the Iranian nuclear agreement will not impact on international oil prices immediately apparent.

　　Long-term oil prices down

　　Iran estimates its energy within a month after the lift overall crude oil production will increase from 50 million barrels a day to 60 million barrels, inventories currently 3,500 barrels of oil can be used for export production before its restoration. Taken together, the total amount of Iran's crude oil exports is expected to be in full within three months after the lift to double to 2.5 million barrels per day. If the estimate is accurate, it's the next two years will inevitably put downward pressure on international oil prices.

　　In fact, during the sanctions take effect, Iran has not given up the development of new oil fields. Back in 2009, Iran and signed the upstream oil development contract worth $ 4.7 billion in South Pars (SouthPars) gas fields of the project. Since then, the Chinese assistance, Iran's South Pars gas fields and rich reserves of condensate oil field development, gas condensate output reached 120,000 barrels per day, this number will continue to increase in 2016.

　　Condensate production has now become the main Iranian crude oil production. It is estimated that production of crude oil condensate production in Iran will increase by 10 million -20 million barrels / day in 2016. And as more and more oil wells and new drilling restart mining, Iran's crude oil production capacity will be further improved in the second half of 2016, even before the sanctions may rise to the level of 2017 (more than the current level of production 750,000 bbl / day).

　　Since there is sufficient stock of oil, Iran's oil exports will far exceed its current production capacity. In the past few years, a large number of Iranian crude oil stored in tankers offshore and onshore storage tanks. Although this is 3500 million barrels of oil is not a one-time inventory into the market immediately, but Iran is ready in 2016, when production capacity began to recover in order to continue to supply crude oil stocks for export.

　　Weakness in global oil demand, and OPEC does not cut policy and adhere to background US shale oil under the rapid development of science and technology innovation, Iran will inevitably return to the oil market supply and demand structure caused by the strong impact of international crude oil is expected in 2016, Iranian crude oil may Global crude oil continued to worsen overcapacity environment and further depress prices.

　　Limited short-term impact

　　As of June 2015, Iranian crude oil average daily production has been gradually restored to 283 barrels per day. However, considering the Iranian nuclear deal still needs the United Nations on [microblogging] formally adopted by the Council and the US Congress, the new agreement may not eliminate immediately the sanctions against Iran's crude oil exports, the full implementation will take several months, but the infrastructure is still Iran's crude oil production rehabilitation among Iran's crude oil exports in 2016 to shown signs of potential. That is, the first batch of Iranian crude oil exports increased in early 2016 and will enter into the international market. Therefore, expected to go to 2016 or 2017, Iran's crude oil exports will start the influx of international markets, exacerbating the excess supply situation in the oil market, oil prices continued to pressure, the rebound is limited. But the short term, Iran sanctions lifted and will not immediately increase crude oil supply market.

　　In addition, since September 2014, international crude oil prices fell sharply, the current price level to some extent, already reflect the market is expected to lead to the Iran sanctions are lifted to increase the supply, and therefore the Iranian nuclear agreement on crude oil price shocks in a short time relatively limited. In the coming months, we still might see oil prices fell below $ 50 / bbl, or even fall further. However, such short-term fluctuations in oil prices directly from the market panic rather than fundamentals.

　　In summary, the Iran sanctions cancel a limited impact on the international oil market in the short term. There are two reasons: First, Iran wants to resume production level of need several months before the sanctions, but Iran will not immediately select dumping large amounts of crude oil to the international market; the second is Iran nuclear talks since April lasted several months, the oil market has also been gradually digested the information about the Iranian nuclear negotiations on Iran's resumption of crude oil production is expected to already be reflected in the international oil prices continued to decline in the.

　　In fact, although the Iraqi side reports that more than 200 million barrels of crude / day for export in the next six months abroad, but the actual production capacity of Iran is far below that level. It is reported that in the second half of 2015, Iran's crude oil production will likely remain on the level of 20 million barrels / day. In addition, Saudi Arabia is stepping up efforts to enhance the refining capacity, which means that in the short term, Saudi Arabia will retain more crude as smelting raw materials, its crude oil exports will decline. It would appear that, for the current 9300 barrels / day of crude oil demand, the influx of Iranian crude supplies dropped just add a decline in exports due to the Saudi lead. Therefore, in the short term, the impact of Iranian crude oil on international oil prices is small.

　　In short, it can be expected, the Iranian nuclear talks will adversely affect the global oil market. On the other hand, this adverse effect is not absolute. Against Iranian crude oil on international oil prices could boost consumption levels in emerging economies, increased economic activity will boost demand for crude oil again. But we must recognize that even low prices to stimulate consumption, crude oil market supply and demand return to balance the situation is still difficult and will take time.