BUSINESS

Oil Price Drops To Its Lowest In Over Ten Years

Oil PriceOil prices continued its turbulent slide falling below $28 to 2003 low on Monday as the market anticipated a rise in Iranian exports after the lifting of sanctions against Tehran over the weekend.

Responding to Tehran’s compliance with a nuclear deal, the United States and major powers revoked international sanctions that had cut Iran’s oil exports by about 2 million barrels per day (bpd) since their pre-sanctions 2011 peak to little more than 1 million bpd.

Iran, a member of the Organization of the Petroleum Exporting Countries (OPEC), sounded the alarm on Monday that it will increase production by 500,000 bpd, according to the country’s deputy oil minister.

With Iran once again joining oil market it has opened a floodgate which many stakeholders fear will add to an already oversupplied market thus driving down Brent crude LCOc1 to $27.67 a barrel early on Monday, its lowest since 2003. The benchmark was down 29 cents at $28.64 by 1850 GMT (1350 ET).

U.S. crude CLc1 was down 48 cents at $28.94 a barrel, not far from a 2003 low of $28.36 hit earlier in the session. Trading volumes were thin with U.S. markets closed for the Martin Luther King Day holiday.

Readers Bureau

Edited by Jesus Chan

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