The price of Brent Crude hit above $63 a barrel today, the highest it’s been this year. That gives Alaskans something to cheer about, but the head of the U.S. Energy Information Administration told a Senate panel Thursday two political events on the horizon would likely bring the global price down.
Adam Sieminski says if Iranian sanctions are removed, a lot of oil would come onto the market, and no one knows if that would be gradual or all at once. Sieminski says Iran has about 30 million barrels of oil in storage, and it would likely increase its production rate if it’s not facing sanctions.
“So the total amount would be about a million barrels a day of production coming onto the market, and it’s really hard to see right now senator, how that could be absorbed without causing other production to go down, or the price to go down,” Sieminski said.
Sieminski was answering a question posed by Alaska Sen. Lisa Murkowski. Senators from non-producing states tend to focus on gasoline prices. Sieminski refuted the claim that allowing crude oil exports would raise the price at the American pump.
“What that does suggest if more crude oil enters the global markets, whether it’s from U.S. Exports, or from Iran, or from production anywhere, it would tend to lower the global oil price, which would tend to lower the gasoline price in the U.S,” Sieminski said.
Lifting the oil export ban is one of Murkowski’s major initiatives as chairman of the Senate Energy Committee.