Recession, retrenchment, revolution? Impact of low crude prices on oil powers

Iran is rushing to implement the landmark nuclear accord in order to cash in on sanctions relief as early as next month, but the plummeting price of oil is tempering its expectations even though its economy has become less dependent on crude sales.

Tehran currently exports 1.1m barrels of oil per a but the Iranian oil minister, Bijan Zanganeh, has announced that the country is aiming to double that amount within six months of sanctions being lifted, hoping it will return to the pre-sanctions level of 2.2m.

Although the EU lifted Iranian sanctions in October after the Vienna nuclear agreement, the measures will only come into effect after what has become known as “implementation day”, the unknown date when the UN nuclear watchdog, IAEA, will verify that Iran has taken the necessary steps as outlined under the nuclear deal. Iran is expediting whatever it can to bring this date forward to as early as January.

In an effort to woo foreign investment in the post-sanctions era, Iran put a set of new lucrative oil and gas contracts, worth more than $30bn, on the market this month. But all these efforts have come at a time when global oil prices are falling as a result of a crude surplus of 2m barrels a day, a phenomenon Tehran blames on the Saudis.

“The drop in oil prices hurts all oil producers, not just Iran,” said Amir Handjani, president of PG International commodities trading services and a member of the board directors of RAK Petroleum.

“Saudi Arabia is very aware that Iran will be able to sell its crude unencumbered by sanctions on the international market very soon and will use all means at its disposal to make sure Iran doesn’t recapture the market share it lost over the past four years,” he said.

 

http://www.theguardian.com/business/2015/dec/30/oil-iran-saudi-arabia-russia-venezuela-nigeria-libya


Glossary


 

Recession   uk   us   /rɪˈseʃən/   N

a ​period, usually at least six months, of ​low ​economic ​activity, when ​investments ​lose ​value, ​businesses ​fail, and ​unemployment ​rises:

“The ​experts ​predicted recession in the coal ​industry. “

“The ​retail ​sector is now in recession.”


 

Retrenchment   uk   us   /rɪˈtrentʃ.mənt/   N

the ​act of ​spending less or ​reducing ​costs:

“ The ​closures will be the first ​substantial retrenchment at the ​store for 10 ​years.”

“ The ​big retrenchment in ​aerospace ​manufacturing in the early 1990s eventually ​infected the entire ​state ​economy. “

“Businesses are going for ​growth, after the retrenchment of recent ​years.”


 

Rush   /rʌʃ/

to hurry to do something

“There’s no need to rush. We’ve got plenty of time.”

“Don’t rush your decision.”

rush to do something:

“Hayley rushed to answer the phone.”


 

In order to

For the purpose of


 

Cash in

to use an opportunity to make a profit or gain an advantage

“Profiteers cashed in during the gasoline shortage.”

cash in on:

“They accused her of trying to cash in on her daughter’s fame.”


 

As early as

at a time that is sooner than people expect

“We may announce the winners as early as tomorrow.”


 

Plummet   /ˈplʌmɪt/  

to go down in ​amount or ​value very quickly and suddenly: ​

“House ​prices have plummeted in recent months.”

plummet (by) sth

“First-half ​advertising ​revenues plummeted 13%, compared with the same ​period a ​year ago.”

plummet to sth

“ The ​food retailer’s ​shares plummeted 17.5p to 227.5p.”


 

Temper   uk   /ˈtem.pər/  us   /-pɚ/

to make something less ​strong, ​extreme, etc.:

“My ​enthusiasm for the ​venture was tempered by my ​knowledge of the hard ​work that would be ​involved.”

“ I ​learned to temper my ​criticism.”


 

Announce   /əˈnaʊns/   V

to make a public or official statement, especially about a plan, decision, or something that has happened

“There was a press release announcing the Senator’s resignation.”

“Exxon has announced a 26% increase in profits.”

announce (that):

“I am pleased to announce that the Board has agreed to create 500 new jobs in our sales division.”


 

Aim   /eɪm/   V

to ​intend:

[+ to infinitive] “I aim to be a ​millionaire by the ​time I’m 35. “

“We are aiming for (= ​planning to ​achieve) a 50 ​percent ​share of the ​German ​market.”


 

Measure   /ˈmɛʒə/   N

actions or procedures intended as a means to an end:

“to take measures to avert suspicion.”


 

Come into effect

if a new rule or law comes into effect, it starts to be used

“The law came into effect on New Year’s Day.”

come into effect from:

“The new Council Tax rates came into effect from 1st April.”


 

UN   United Nations

سازمان ملل متحد


Watchdog     /ˈwɒtʃˌdɒɡ/     N

a person or organization that works to stop people from doing illegal things in a particular area of business or society

“the consumer watchdog for transport in London”

watchdog agency/body/group:

a watchdog agency for consumers


 

IAEA   International Atomic Energy Agency

آژانس بین‌المللی انرژی اتمی


 

Outline   uk   us   /ˈaʊt.laɪn/   V

to list or describe the main features or parts of

“Mother went on outlining her plans for the storeroom.”


 

Expedite   /ˈek.spə.daɪt/   V

to cause something to be done more quickly:

“Something ​needs to be done to expedite the ​process.”

“We’re ​trying to expedite the ​process of ​reviewing ​applications.”


 

Woo   /wuː/   V

to try to persuade people to support you or to buy something from you, especially by saying and doing nice things

“Supermarkets are trying to woo customers by cutting prices.”

“The party is clearly trying to woo women voters.”


 

Lucrative     uk   /ˈluː.krə.tɪv/  us   /-t̬ɪv/   Adj

earning or ​producing a lot of ​money:

“He gave up a lucrative ​career as a ​lawyer to ​look after his kids.”

“ The contest for this ​potentially lucrative ​market has been intense.”

extremely/highly/very lucrative “This ​business is ​highly lucrative.”

a lucrative ​business/​contract/​deal


 

Surplus   uk   us   /ˈsɜːpləs/   N

an ​amount that is more than is needed:

a surplus of sth

“The ​plant had a surplus of ​components.”


 

Commodity     uk   /kəˈmɒd.ə.ti/  us   /-ˈmɑː.də.t̬i/   N

a ​substance or ​product that can be ​traded, ​bought, or ​sold:

“The country’s most ​valuable commodities ​include ​tin and ​diamonds.”

“ the ​international commodities ​market”


 

Encumber     uk   /ɪnˈkʌm.bər/  us   /-bɚ/  V

to impede or hamper the function or activity of ; hinder;

“negotiations encumbered by a lack of trust”


 

Means   /miːnz/   N

a method for doing or achieving something

“Information is not easily obtained by any other means.”

“an effective means for finding qualified job applicants”

means of:

“What means of transport is she using?”

no means of doing something:

“We had no means of warning them.”


 

 At one’s Disposal   /dɪˈspəʊz(ə)l/

If you have something at your disposal, you are able to use it whenever you want, and for whatever purpose you want; ​available to someone:

“I would take you if I could, but I don’t have a ​car at my disposal this ​week.”

“It’s great that we have this ​innovative ​technology at our disposal.”


 

Recapture  /ˌriːˈkæp.tʃər/  us   /-tʃɚ/   V

to win something again from an opponent

“He is trying to recapture his world record.”


 

Lost  past tense of lose /luːz/

to ​fail to ​succeed in a ​game, ​competition, etc.:

“If we lose this ​game, we’re out of the ​championship. “

“They’re losing 3–1. “

“They lost to Cincinnati. “

“Everyone ​hates losing an ​argument.”

“ They hadn’t lost an ​election in 15 ​years.”