Sanity prevails – Iran has sanctions lifted – watch the oil price now!
Iran and six world powers sealed a historic accord to curb the Islamic Republic’s nuclear program in return for ending sanctions, capping two years of tough diplomacy with the biggest breakthrough in relations in decades.
Diplomats reached the deal in Vienna on Tuesday, their 18th day of talks. Iranian Foreign Minister Mohammad Javad Zarif called it a “win-win” solution to an “unnecessary crisis.”
With new oil flows expected to hit an oversupplied market, Brent, the global benchmark, fell as much as 2.1 percent to $56.63 a barrel and traded at $56.81 at 11:19 a.m. in London.
Expect more borrowings to be undertaken by the cash starved OPEC Gulf nations – overspend they do – now they have no idea how to budget.
Saudi Arabia has to borrow to fund the deficit.
Total revenues are forecast down 33.7 percent at $185 billion, while public spending is expected to remain almost unchanged at $290.9 billion.
Jadwa said the government is highly expected to return to the debt market for the first time in around 15 years despite its massive reserves.
“The government is now expected to issue debt as part of its deficit financing strategy,” it said.
Saudi Arabia has massive foreign reserves, which stood at $714 billion at end February, but Jadwa said borrowing would eliminate the need for the reserves to be the sole source of deficit financing.
So there you have it – more countries entering the bond market and with a lower oil price expected – more grist for the bond market collapse.