Matt Badiali, a natural resources expert, wrote in a recent article that higher oil prices are coming down the pike. Beginning in the fall these higher prices will hit, in no small due to the United States exiting the agreement made with Iran and its nuclear power. This agreement, signed in 2015, had allowed Iran to start exporting its oil and engaging in other international trade.
Exiting this agreement meant that oil sanctions against Iran will start in November. As Iran exports about 2.2 million barrels of oil a day this is going to have a large impact on the price of oil. This amount of oil is too large of an amount for other nations like the United States, Saudi Arabia, and Russia to replace.
There are countries, including China, who have refused to take part in the American embargo of Iran. They will continue to import oil from Iran as much as they have before, Matt Badiali wrote. Still, other countries are setting up alternatives to get the oil they need. An oil executive in India, Sanjiv Singh, stated that no matter what happens with oil from Iran his country would continue to get the same amount of oil just from other sources.
Matt Badiali says that in order for oil prices to not go up in the fall absolutely nothing else can go wrong. That means Venezuela, Libya, and Nigeria continue to pump the same amount of oil. The Middle East also needs to not have any disruptions. While speculators appear to believe oil prices won’t go up he feels they are wrong and so he is taking a long position on oil.
Matt Badiali writes about oil and other natural resources in a financial newsletter, Real Wealth Strategist, published through Banyan Hill Publishing. He has a master’s degree in geology so his educational background and experience make him a natural fit to research the natural resource market and give his opinion on where investment opportunities lie. He has been writing about these sorts of investments for the past 14 years.