FX.co ★ Middle East boosting oil export sales

A new serious player has appeared on the global oil market. Iran has been exporting oil in increasing volumes taking advantage of temporarily relaxed Western sanctions. Currently, Iran is supplying massive 1.2 million bpd. It is too early to compete with the most powerful global oil suppliers. However, Iran has revealed its capacity to deliver oil in an accelerating pace. So, it is expected to satisfy needs of top global oil consumers in the near future. Just half a year ago, the country shipped merely 700,000 bpd. It means that oil export sales have rocketed 70% in a short period. The new market participant has turned up in the right time as the pending threat of the military clashes in Ukraine might change crucially the delivery schedule of energy supplies. Thus, a lot of world consumers are relieved that the Iranian government expressed readiness to boost export sales. It gives the countries dependent on regular oil supplies more confidence. Importantly, the current export volume of 1.2 million bpd is actually 20% higher than the most upbeat expectations of local analysts. Interestingly, Iran which is economically enclosed from the outside world has started to establish international relations. Temporary easing of the Western sanctions aimed at curbing the Iranian nuclear program gives Iran the opportunity to reach high gear in oil production and export sales. The stance of the new government toward the West has yielded great results. Foreign observers sometimes do not take into account a slump for more than two years. Indeed, the oil production shrank to the lows since 2012. Thus, the world oil market suffered a lot during this period. Nowadays, the opposite trend has gained momentum as a huge amount of affordable oil is being supplied to the market. Considering the slack capacity of export sales from Libya, we will see what impact it will have on oil prices.