Louisiana Oilmen Express Concern Over Iran Nuclear Deal
Based on conversations I have had around town and in the office most of us, myself included, do not understand totally the ramifications of a deal with Iran to end trade sanctions. Most of what you hear reported in the national media has to do with nuclear operations in Iran and how those will be monitored. That is certainly a big part of the story, but why does that story affect me in Louisiana? Oil, that's why.
If economic sanctions against Iran are lifted that country will again be able to sell its oil on the open market. That will mean billions of dollars in cash flow for the Iranian government. It will also mean a glut of oil on the market and the price of oil will go down. That would be good news if your economy is built on oil and gas production. By the way, the Louisiana economy is built around a strong oil and gas industry so we have a bit of an issue here.
Don Briggs is President of LOGA, the Louisiana Oil and Gas Association, he addressed this issue with the Louisiana Radio Network,
Putting this new oil into the marketplace will be a continuation of suppressing those prices and very possibly prolonged into 2017 and that's my concern.
Also making this a sticky wicket is the fact that while other countries can sell oil to the United States, our producers are not allowed to sell their oil over seas. Even when production is in excess of actual needs companies have to either quash production or just sit on the supply.
The threat of more oil on the market will have an effect on jobs in the state as well.
Oil companies have been hanging on to their key personnel and I am very concerned that if we see prices in the $50 - low $50 range, that we're going to see companies lay off very key personnel.
As you might imagine Louisiana's Congressional delegation is none to pleased with this proposed agreement. For most observers in our state the agreement with Iran serves more the political needs of the current President than it does the actual needs of the citizens of these United States.