[FLASHBACK] ‘Oil Prices Could Rise Considerably’ If U.S. Imposes New Sanctions on Iran

08/07/18 09:00AM EDT

[FLASHBACK] ‘Oil Prices Could Rise Considerably’ If U.S. Imposes New Sanctions on Iran - 08.09.2018 oil cartoon

"US aims to crush Iran oil sector in next wave of sanctions"

That's the latest headline from CNBC this morning. Investors just waking up to this reality missed a considerable move in oil prices. Senior Energy Policy analyst Joe McMonigle has been warning about how the imposition of Iranian sanctions could cause oil prices to "rise considerably." (Oil prices are up almost +40% since McMonigle's call.)

Why are oil prices rising?

With the threat of sanctions looking increasingly likely, the media is doing the math and coming to precisely the same conclusion McMonigle came to in October 2017: Sanctions could remove about 1 million barrels per day from the market.

This reality is becoming more evident with each passing day. Here's the latest tweet from President Trump:

https://twitter.com/realDonaldTrump/status/1026762818773757955

From an investor and track record standpoint, McMonigle specifically called:

  1. Trump would reimpose sanctions (we've been saying that since before the election) and
  2. That US sanctions would remove about 1 million b/d of Iranian crude exports from the market (most analysts and financial media folks scoffed at this number and had a much lower range 200-500 b/d).

As McMonigle explained on October 2017 during an institutional conference call:

This could be a watershed moment for oil prices. Iran has added 1 million barrels of oil per day since sanctions were lifted as part of the Iran nuclear deal negotiated during the Obama administration. If the U.S. imposes further sanctions on Iran, “I think you’re going to see oil prices rise considerably,” warns McMonigle.

Since this video aired in October 2017, oil prices are up +37.7%.

Watch McMonigle in the video below (from that October 2017 institutional conference call) explain his rationale. His insights have been spot on.

https://youtu.be/hd6-1yfne14

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