George Johnson comments on the impact Iran’s nuclear agreement will have on the oil market.
“The Iranian nuclear agreement is a severe blow for short-term fundamentals in the oil markets. This has the potential to push prices closer to $50/barrel. Although it remains unclear how much Iranian oil will be exported, there simply isn’t enough demand to absorb it – the market is already over-supplied.
“With OPEC pumping well-above the 30 million barrels per day (mbpd) quota coupled with lacklustre demand from China, things are looking pretty bearish right now.
“In the coming weeks OPEC will come under mounting pressure to cut production as the introduction of Iranian barrels will only exacerbate the global demand-supply imbalance.”
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Simon Chan, KPMG Corporate Communications
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This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.