The high price of crude oil in world markets is crucial for the Norwegian economy. The opening of stock exchanges on Monday, however, brought them down. Experts associate this fact with the announced sanctions to be imposed by the US on Iran. The increased production of the OPEC countries and the United States is not without significance.
Monday's drop in prices
The opening of world markets on Monday morning brought a drop in oil prices. At Friday's close, the barrel was traded at $ 77,64 and dropped 21 cents over the weekend. There are two main reasons for this phenomenon.
Sanctions against Iran
The United States has announced that it will impose economic sanctions on Iran. They are to affect the Iranian oil industry and will enter into force on October 5 this year. They are expected to contribute to price increases in the long run. However, the Monday's opening of global markets showed that the sanctions were prompted for a correction in the value of this commodity.
More OPEC and USA production
The Reuters editorial office believes that the increase in production by OPEC countries has the greatest impact on the reduction in oil prices. The latest data indicate that in the period July-August, these countries extracted 220 thousand. barrels more than in earlier periods. As a result, production is at its highest this year at 32,79 million barrels per day.
The United States has also increased its production. It is estimated that it has increased by 2016% since 30 and currently hovers at the level of 11 million barrels of crude oil per day.
Prices are likely to rise
Despite the fact that the announced sanctions against Iran are one of the reasons for the Monday's fall in prices, they will increase prices in the long run. According to the assurances of Edward Bella - an analyst from the NBD bank in Dubai - Iran in August extracted 150 thousand. barrels a day and was the 7th largest country in terms of production in the world. According to the economist, the imposition of sanctions on this country will make importers turn to other oil tycoons. In the long run, such an increase in demand will lead to an increase in raw material prices, which is good news for the Norwegian economy.
