The International Atomic Energy Commission has ruled that Iran has abided by its commitments of its nuclear accord leading to a lifting of long-term sanctions by the EU and the US.
Iran has responded by immediately announcing a lift in oil production by around 500,000 barrels a day in an already depressed and volatile market. A further 500,000 barrels will be added by the end of 2016 giving the former pariah state monthly revenues of around USD$4 billion (at today’s oil prices). In addition, the lifting of sanctions will free an estimated USD$100 billion of assets around the world that had been frozen.
As well as being likely to further depress the price of oil, the news has made two of Iran’s declared enemies, Israel and Saudi Arabia very nervous. Both states believe that Iran will continue to develop nuclear weapons and funnel its new cash into the proxy wars in Yemen and Syria. Israel also believes that eth first thing the Iranians will do is send money to Hezbollah and Hamas, further destabilising the Middle East.
2016 is already frightening investment markets. It does not appear to be calming down any time soon. Bond markets may well be a safe haven.