Brent oil remains under pressure falling to $57.05 as I write. It’s all about Iran and John Kemp has a neat take on why:
The sudden drop to 1622 bpd in 2013 and then 1366 bpd in 2014 therefore looks like the impact of choking wells rather than natural declines.
…In any case, Iran has told OPEC that it has drilled around 300 new wells per year since 2012, which should have been enough to offset natural production declines.
…So it seems reasonable to assume Iran still has the capacity needed to pre-sanctions levels within a relatively short period of time simply by re-activating idle wells and increasing the flow rates on others.
The full text of this article is available to MacroBusiness subscribers
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
The sudden drop to 1622 bpd in 2013 and then 1366 bpd in 2014 therefore looks like the impact of choking wells rather than natural declines.
