Nuclear Deal with Iran Impacts U.S. Producers Negatively

A nuclear deal with Iran is bad for U.S. oil producers, even if the ban on U.S. oil exports is lifted. The negative impact on U.S. oil producers is not only from the additional oil production that Iran will bring online, once sanctions are lifted, but also from OPEC-on-OPEC competition as a reaction to the deal. A normalization of relations between the U.S. and Iran, which some might view as far-fetched at this time, should benefit large service companies and oil majors, but not the medium-sized and smaller independent companies that brought the shale revolution. In addition, in the long run, Iran’s LNG exports will compete directly with U.S. LNG exports.