Updated 03:05 AM EDT, Wed, Oct 20, 2021

Iran Threatens to Floods Oil Market Even Further

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The oil glut crisis has gotten worse as Iran is trying to flood the market even more with its plan to export big amounts of oil to other countries after the United States lifted restrictions on its crude last year.

According to Financial Buzz, the country's move has caused more problems in the oil market with the price dropping below $30 per barrel.

It explained that even though the global consumption of oil has already increased, oil-exporting countries are still not relieved.

Profit Confidential explained that since Iran is not anymore restrained in terms of oil production and can freely engage in trade with Western nations, the prices of crude will remain problematic.

It claimed that the country does not only plan to up its production of oil but also plans to stop itself from being too dependent on the US currency.

The same report mentioned that the nation's government has already advised oil buyers to purchase using euros and not American dollars.

Iran's plan comes after Venezuela has just bought crude from the United States despite having billions of barrels of oil.

According to CNN, the Latin American country has about half a million barrels of oil, transported using a ship from the US last week.

CNN noted that this action has made a lot of people skeptical since Venezuela is known to have 298 billion barrels of oil reserved already, based on figures from the Energy Information Administration.

But it explained that the oil in the country is "heavy and hard to refine" prior to it being sold to other nations.

A process of mixing this oil with other crude types is required to be able to attain a quality which will be approved by nations wanting to purchase oil.

This global problem on oil, as per Financial Buzz, seems to be getting worse as Organization of Petroleum Exporting Countries (OPEC) Saudi Arabia and Venezuela were not able to make a deal in a meeting this week.

It was also noted that the two countries discussed the future of the oil industry and touched on plans to regulate oil supply as well as the prices for export.

The oil glut crisis started when the strong oil output in the Middle East and the United States caused the extreme reduction of oil prices, the lowest recorded in more than 10 years, as per the Wall Street Journal,

The global oil glut has reportedly pulled the price of an oil barrel by almost 60 percent in the last 18 months.

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