Holy Crap the Iranian Oil Bomb will Be Huge: Time to Short Oil even Harder?

Iran is sitting on a huge glut of unsold oil and shuttered production. According to this article once sanctions are lifted they will unleash all of this on the already weak market.

But once those steps are complete, Iran will quickly look to sell off approximately 35 million barrels of surplus, stored oil for which it has apparently not managed to find buyers. Analysts don’t seem to make much of this ready inventory, but if Tehran sells it in 500,000-barrel-a-day increments—a reasonable pace—it could send an already-saturated market back into a price nosedive for more than two months.

That $50 per barrel oil we have now will look like a tall ceiling if you add this amount of stockpiled oil to the global stockpile.

But that isn’t all. After that, Iran will push production back up at currently producing fields. Until the sanctions hit in 2012, Iran produced 3.6 million barrels of oil a day, of which it exported about 2.5 million. Today, it produces much less—about 2.8 million barrels a day—and exports just 1.1 million.

So Iranian oil exports will shoot up for the rest of the year. Also the Iranians will want to sell this stuff at rock bottom prices to raise its cash reserves for proxy wars and such. So there will be lots of $15 a barrel Iranian oil sloshing around. You add to the fact that rock bottom oil prices put a thumb in the eye of the Iranian enemies who are the Saudi's and Americans with their shale oil and you get a double bonus if you are the Mullahs.