Oil prices are retreating again because of Iran

Oil prices may have flirted with rising above the $40 per barrel mark over the last week but anyone hoping for a surge in oil prices will have to wait a little longer.

Both crude and Brent oil have tumbled again after the Iranian Oil Minister Bijan Zanganeh killed all hopes in joining Saudi Arabia, Russia, Qatar, and Venezuela to freeze oil production.

According to Iran’s ISNA news agency, cited by Reuters, Zanganeh said that the country will not freeze production and therefore help alleviate the over-supply in the world market until it
doubles its post-sanctions output.

Basically, the markets would be happier if Saudi Arabia promised to cut — not freeze — production, and if Iran and Iraq joined the countries in pledging to put their output levels on ice.

Iran has only just had its sanctions lifted and it is not looking at reducing the amount it can produce while it is trying to rebuild its battered economy with lucrative oil reserves. Oil production constitutes 23% of Iran’s wealth, according to Trading Economics. Iranians are going to put their own economy before the interests of the Russians and the Venezuelans.

“They should leave us alone as long as Iran’s crude oil has not reached 4 million. We will accompany them afterwards,” said Zanganeh, according to INSA.

Crude oil is now over 2% lower, reaching just below $38 per barrel as of 9.15 a.m. GMT:

Meanwhile, the futures oil contract Brent fell below the $40 per barrel mark again:

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