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OPEC & Iran Are Worried
By Micah Halpern

Wednesday March 18, 2009

I've Been Thinking:

Iran and several other OPEC countries are worried.
They think there is too much oil out there and they want to cut back production.

Here is the fundamental problem:
Iran wants to limit production to increase the price of oil per barrel.
They want to use the oil card as a political tool.
They are also embarking on a huge natural gas campaign.

Iran intends to get as much natural gas as possible, convert it to Liquid Natural Gas (LNG) and become a world class supplier. The Iranians just signed a contact with China for $3.2 billion. China will pay Iran and China will build the LNG technology conversion and Iran will try to prove that they can be the world’s best conduit.

OPEC and others are not buying the Iranian argument.
They do not want to rock the very volatile oil market too much.
They are not altering or limiting oil production quotas because to do so would be to send the market into disarray.

The US responded to increased prices by significantly reducing consumption.
That reaction totally flabbergasted OPEC and brought about their decision not about to mess with the current market.

Let the Iranians suffer.

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4 June 2017 12:13 PM in Thoughts


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