I wrote last week about how oil exports are coming back online in Libya. With the OPEC nation lining up its first shipments in 9 months.
News last week suggests that's not the only "new" crude supply coming to market. With another key producing nation seeing a big upsurge in export volumes.
That's Iran. Where local media quoted government officials as saying that exports have hit 1.2 million barrels per day.
This is a big increase for Iranian exports. Just 8 months ago, the nation was shipping only 700,000 barrels per day. Meaning exports have risen over 70% in a short period of time.
The increase has mainly come on the back of softening international sanctions. Brought about by the election of a more Western-friendly government. Which has given many crude buyers globally the confidence to once again begin sourcing Iranian oil.
Notably, current export levels are 20% higher than even the Iranian government had forecast. And these are expected to continue rising as the former pariah nation continues to normalize its relations with the world.
Observers in the oil market often forget that Iranian crude output has been hobbled since early 2012--a direct consequence of sanctions that kept out needed supplies and assistance. Between March and October 2012, the country's overall production fell by over 700,000 barrels per day.
That's meant a lot of supply has been lost to the global market over the past two years. A phenomenon that is now reversing.
Combined with potentially strengthening exports from places like Libya, this could mean a lot of new oil coming available to buyers. We'll see what effect all of this has on prices. At the very least, it's a good time to be cautious on new oil investments driven by international crude pricing.
Here's to the forgotten producers,
By Dave Forest