It’s a true tell of the state of the markets, when a tired old story sends oil rocketing about 10% higher in price

In this case, that “tired old story” is Venezuela calling for an emergency meeting of OPEC and Russia.

Venezuela has a habit of calling for such meetings because its leftist government thinks oil should never sell below $100 per barrel.

The market reaction tells me that the oil price has further to decline. Too many people are still too anxious to jump aboard the oil train before it leaves the station for the land of higher prices.

And why exactly do I believe the price of oil will further decline? In a word: Iran.

Get Ready for a Flood of Iranian Oil

Economic sanctions have been lifted from Iran and its oil is starting to flow to ports across the globe.

Iranian oil exports are set to rise by a fifth in January and February to roughly 1.5 million barrels per day. That’s a two-year high. Much of this oil is part of the 40 million barrels of oil Iran had floating in its fleet of oil tankers.

What the market should worry about is the amount of new oil Iran will be pumping out of the ground very soon. Let’s recall that Iran’s readily accessible oil reserves are second in the region to Saudi Arabia.

Iran issued some soothing sounds recently about not rocking the oil boat with too much more production. But why would Iran not want to rock the boat of both the U.S. and Saudi Arabia?

It was just last September that Iranian oil minister Bijan Zangeneh said, “The drop in prices won’t be a concern for us. It should be a concern for those who have replaced Iran’s [market share].” Even just before the New Year, Zangeneh reiterated that Iran would cut prices in order to regain market share.

Iranian Oil – Dirt Cheap

Were the Iranian oil minister’s words just hyperbole, or is Iran really unconcerned by the current price of oil?