Short but potentially very important note for the oil market over the weekend. From a place that’s been one of the major focus points for the petroleum industry lately.
That’s Iran. Where the threat of rising oil exports has been weighing on crude prices now that Western sanctions against the former “rogue” nation are being lifted.
That has led many analysts to conclude that supplies from Iran could ramp up fast over the coming months.
But events this past Saturday suggest it may not be quite that easy.Related: Is China The Big Sponge That Absorbs The Oil Glut?
Bloomberg reported over the weekend that protesters in Tehran had surrounded Iran’s oil ministry. With the crowd demanding a re-examination of new oil and gas contracts being offered to foreign companies working Iranian fields.
Sources told the news service that protesters were chanting “give us back our oil” and “cancel the IPC” in reference to the “Iran Petroleum Contract” that has been proposed as a new model for foreign investment in Iran’s oil and gas sector.
Sources noted that a “severe confrontation” had taken place between protesters and authorities. Suggesting that local opposition to the opening of Iran’s oil and gas fields could be stronger than most observers had anticipated.Related: U.S Drillers Post Billions In Losses As Hedges Roll Off
As an interesting twist, officials from the National Iranian Oil Company also said over the weekend they are cancelling an oil and gas event in London that had been planned for February — to promote investment in Iran’s new petroleum contracts.
The company blamed British authorities — saying that Iranian attendees for the event are having trouble obtaining visas to enter the U.K.
The timing of the protests and the event cancellation however, are suspiciously coincidental. Raising the possibility that Iran could be rethinking its oil and gas strategy in light of internal opposition.
Watch for more news on this front over the coming months — including a possible rescheduling of the petroleum contracts showcase. In the meantime, it’s worth considering that Iran’s return to the crude market may not be as smooth as many analysts have been expecting.
Here’s to getting your house in order
By Dave Forest
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