Oil is getting crushed on Monday as Iran announced its latest figures on oil production, and a series of familiar problems weighed on the price of the world’s most crucial commodity.
Over the weekend, Iran announced that production of oil in the country has passed two million barrels per day since sanctions by Western nations lifted in January. That increase in production — around 250,000 bpd since March 1 — has helped increase the already huge oversupply in the market, and sent oil lower on Monday.
Just after 8:50 a.m. BST (3:50 a.m. ET) both major benchmarks are trading at a substantial loss, and have fallen to near one-month lows. Brent crude, the European benchmark is at $38.25 per barrel, down 1.09% on the day, while American WTI crude has slipped 1.36% to $36.29.
That extends Brent’s losses since March 30th to nearly 7%, and WTI’s losses beyond 8% in less than a week’s trading. Here’s how that looks:
Along with the Iranian supply increase, the price of oil is also being driven lower by worries that a freeze in production — which was agreed in late February — isn’t actually going to happen. On Friday, Saudi Arabia’s Prince Mohammed bin Salman told Bloomberg that the country will not proceed with a freeze in production unless other major producers, including Iran come on board.
Oil producing members are set to meet in Qatar in two weeks time to discuss a freeze, but who will attend, exactly what they will discuss and if any action will be taken, is unclear.
The price of oil had rallied from less than $30 per barrel in mid-February, to well above $40 a couple of weeks ago, but since then production fears have returned, and sent oil plummeting once again.