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The easing of President Donald Trump's stance on Iran is creating big problems for Saudi Arabia. The Saudis and Iranians are not only enemies, but the reduction of tension between the United States and Iran could allow Iranian oil to return to the market and defeat the Saudi Aramco IPO. the Saudi.
According to Charlie Gasparino of the Fox Business Network, JPMorgan Chase and Goldman Sachs are in the running to lead the IPO of the world's largest oil company, with a valuation of $ 2 trillion. However, to reach this high figure, the price of a barrel on the oil market will have to be much better.
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Over the weekend, Saudi Arabia appointed a new energy minister, Prince Abdulaziz bin Salman, with the express purpose of raising oil prices before the IPO. This job is now much more difficult than it was a few days ago.
Oil prices collapsed on Tuesday after National Security Adviser John Bolton left the White House. The known departure of the Iranian hawk increases the chances that oil sanctions against Iran will be lifted.
That would be a radical change, as the oil market assumed that President Trump would exert maximum pressure on Iran until they yield and return to the negotiating table. Crude oil has sold even harder after the announcement of Bolton's release because of his deep disagreement with the president to engage the Iranians.
Asked on Wednesday whether the lifting of oil sanctions against Iran was now on the table, President Trump said: "We will see what happens."
A phone call between Iranian President Hassan Rouhani and French President Emmanuel Macron has given rise to new speculation. President Macron served as an intermediary between Iran and the United States and, while President Rouhani reportedly said that Iran would not negotiate until sanctions were in place, it seems that Trump is willing to change that.
Iran will take some time to increase its exports, but at least 12 to 14 million barrels of Iranian oil are stored in bond in China. It has been reported that Iran has more than five times that amount stored, whether it floats or not. Oil traders know that lifting the sanctions against Iran would result in the sale of oil, possibly resulting in prices well below a level that would make sense for the Saudi Arabian IPO.
To complicate matters, Saudi Arabia is working to ensure that OPEC and Russia align themselves with the principle of compliance in terms of reduced production. Saudi Arabia has taken most of the cuts and now has to convince Iraq, Nigeria and Russia to do their part.
While these countries say they will reduce their production, there is a great temptation to cheat on quotas because the US and its oil producers are stepping up their efforts and seizing OPEC market shares and Russia. The International Energy Agency said that competition for market share is intensifying and comes from preliminary data showing that the United States has momentarily overtaken Saudi Arabia and Russia as "the biggest exporter". of crude oil of the world ".
The Saudis want at least $ 70 a barrel for its IPO. And they really prefer $ 80 a barrel. If President Trump decides to lift the sanctions against Iran, it seems then that the Saudis will be forced to postpone his IPO.
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