1) The oil glut of recent times may have been initiated by U.S. shale, but its momentum has been carried on by Saudi, Iraq and Iran. As the chart below illustrates, Saudi has flooded the market since early last year, in an attempt to flush out higher-cost production.

Iraq has similarly ramped up exports, but due to opportunity as opposed to strategy, while Iran’s return to the global market this year after the lifting of sanctions has added an extra layer of oversupply.

After OPEC’s landmark decision yesterday, the hard work begins for the cartel. Saudi’s heavy lifting of nearly 500,000 bpd doesn’t seem that back-breaking, given it seasonally reins in production by this much anyway after a mid-summer peak (a drop we didn’t see this year…hmmm).

As for Iran, oil minister Bijan Zanganeh seemed as happy as Larry after yesterday’s meeting, and so he should be, given Iran is still allowed to increase production, while most others cut. The willingness of Saudi to get this deal done is starkly illustrated by it granting its arch-rival such a concession. As for who feels most gipped from this meeting, it has to be Iraq, given it has rolled over and agreed to cut by 200,000 bpd. There’s plenty more twists left in this tale, I assure you.

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