The article reports:
The global oil market is already in surplus by about 3 million barrels a day, with Saudi Arabia and Iraq responsible for OPEC’s oversupply in the past six months, Iran’s state-run Islamic Republic News Agency reported Sunday, citing Mehdi Asali. Iran can boost output by 500,000 barrels a day within one week after sanctions are lifted, Oil Minister Bijan Namdar Zanganeh said earlier this month.
…Iran made a “big mistake” when it backed OPEC’s decision in December 2011 to discard individual production quotas, Asali said. That allowed Saudi Arabia, Kuwait and other members to take over Iran’s share which was diminishing because of sanctions, he said.
…Brent oil futures closed at $49.19 a barrel on Friday, down 14 percent for this year.
We have seen this play before. There is an oil price at which fracking, a major part of American oil and natural gas production, is no longer profitable. To restart a fracking operation after it has been suspended is expensive and cumbersome. The easiest way to prevent America from becoming energy independent is to drop the price of oil as America begins to develop her oil and natural gas resources. This severely impacts the development–American businessmen are in business to make money. If fracking is not profitable, they will not invest the money to do it. OPEC would very much like to keep America dependent on their oil. Our dependency on OPEC oil has a tremendous impact on our diplomatic policy in the Middle East. We give money to and support in other ways countries whose basic ideas and values are in total conflict with our own. It would be very nice to be energy independent and be able to make decisions on international matters according to our principles–not our dependence on oil.