Even though the oil market is totally focused on the US supply data this current week, Iran and the deadline for the nuclear program agreement may change things in the coming week.
If the deal between six world powers and Iran is finalized by the deadline of June 30, Iran could soon begin supplying millions of oil barrels into the global market, bring in the sharp return of oil prices at US$ 50.
Byron King, editor of the investment newsletter called Outstanding Investments said that there are at least 34 large tankers of oil in Iran, amounting to around 50 million barrels or even more, that are ready to be sold if the sanctions are lifted.
He added that deals for that oil might already have been wired and some might even be pre-sold. However, that could prove to be a distortion of massive proportions that is waiting to hit the markets as soon as it has been legalized.
Analysts are debating over exactly how much oil Iran possesses in floating storage. However, the one thing they all agree on is that the oil can have a rapid repercussion on the global market.
President of Strategic Energy and Economic Research Michael Lynch said that the amount of oil in floating storage may range somewhere between 30 million to 40 million and that this could have a quick impact on the market.
Michael Lynch further stated that even if Iran sanctions are not right away lifted, buyers such as China and India may take it for granted that enforcement will be lenient. As a result, traders are more likely to allow a slight downward bump when it comes to oil prices, say around US$ 5 per barrel, and later wait for the impact.