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Oil Prices Continue to Drop as Sanctions May Be Lifted in Iran

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Iran is close to finally being allowed to do business with the Western oil market after Congress considers approval a nuclear deal that will lift sanctions imposed on the Middle Eastern country.

According to CNN Money, OPEC is already concerned with the falling oil prices around the world, and believe lifting these sanctions will only drop prices more.

Tehran, the “oil capital” of Iran, is wasting no time in ramping up oil production despite a huge excess in supply that is causing global prices to dramatically decrease.

“Can we wait and not produce after lifting the sanctions? Who can accept it in Iran,” said Iranian oil minister Bijan Zanganeh. “Do you believe that … our country will accept not to produce, to secure the market for others? It’s not fair.”

Over the past decade, global oil reserves have increased by 27%, or over 350 million barrels in total. The re-addition of Iran into the equation will only add to the already growing amount of oil in the global market.

According to local Mississippi news affiliate WDAM, Iran has the fourth largest oil reserve in the world, pumping about 2.8 million barrels a day.

Analysts expect Iran to add between 600,000 and one million barrels to its output once sanctions are officially lifted, but Zanganeh is aiming for an increase of close to 1.6 million barrels by the end of 2016.

Oil prices have been fluctuating wildly in recent months, reaching a six-year low followed by a 30% surge in the span of only three days.

OPEC believes that the Iranian oil will make the market even more unpredictable than it already is. They say the market should be targeting a price of $70 to $80 a barrel. U.S. crude futures are currently trading around $46.

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