Sometimes the world seems to revolve around oil. Personally, you likely use it everyday to get from place to place.
But more importantly, oil is the subject around which billions of dollars revolve.
Whether it would directly affect your portfolio or just your routine fill-ups, an impending crossroads for oil awaits that could cause significant changes to the oil market.
How will it impact the price of oil, and what should you do about it?
Since last July, oil has lost nearly half of its value. And despite holding up well over the past several weeks, more news could soon be surfacing that will have huge implications for the price of oil.
And that news will be coming straight out of the Iranian nuclear arms deal that’s been proposed by the Obama administration.
The U.S. Energy Information Administration, or EIA, believes that any outcome in which economic sanctions against Iranian oil are lifted could mean BIG changes to oil’s price…
According to the EIA, world crude oil prices could fall by $5 – $15 per barrel depending on the outcome of the ongoing talks regarding Iranian nuclear arms.
That figure, of course, will be derived by the potential volume of Iranian oil entering the market, and the impact that would have on supply and demand for oil in general.
Now, it’s worth keeping in mind that such a hefty drop in the price of oil would likely take time—if an agreement were to be made, Iran would still need to comply with any new nuclear program and have it approved by inspectors.
But once that process is completed, Iran would be able to begin selling off its surplus of oil.
Another note that could be of some significance is the fact that Iran has yet to find a buyer for much of its stored oil, but that’s a story that we may get to down the road.
At the moment, my concern is with the price of oil as it reacts to the Iranian nuclear arms talks. Should sanctions be lifted, get ready for a drop.
