Stock exchanges in Saudi Arabia, Kuwait and Qatar plummeted on Sunday, after news that Iran would boost oil exports, further hitting the price of the Brent oil benchmark, Bloomberg reported.
Iran's oil shipping company announced that it would be increasing oil exports by 500,000 barrels per day immediately, from the current 1.1 million according to OPEC data, boosting output by nearly a third. The statements led stock exchanges in oil-dependent Gulf Arab countries to plummet
"Iran is ready to add 500,000 barrels to its crude oil exports in lieu of the current oil market conditions," head of the National Iranian Tanker Company head Amir-Hossein Zamaninia said.
"Iran’s priority is to win back its market share and it has the capacity to increase its oil export," Zamania added.
Iran could also add to the glut in the short term, if previous Bloomberg reports about Iranian oil tankers filled with crude and condensate sitting idle on shore are still correct.
Gulf Kingdoms Take a Dive
Stock exchanges in the Gulf states saw indexes drop to levels not seen in years, and in Yemen's case to a low not seen since 2004, according to Reuters.
At the same time Iran saw its shares rise, as the country's disconnection from the SWIFT interbank message system was dropped, and Iran is expected to be reconnected to the system by February. As many as 1,000 letters of credit, documents used to arrange trade payments by importing and exporting companies, were arranged to be opened on the first day sanctions are lifted, according to Iran's IRNA news agency.
"Investors shouldn’t look at Iran to make a quick buck but rather invest with a long-term view to benefit from the best-performing market of the next five years. We expect the Iranian economy to grow at a rate of 6 to 8 percent for several years," head of Tehran-based investement company Ramin Rabii said on Saturday, as cited by Bloomberg.
Already on rival sides of conflicts in Syria and Yemen, Saudi Arabia cut diplomatic and economic ties with Iran following an incident which saw Iranian protesters breaking into the Saudi embassy after the execution of a prominent Shiite preacher in Saudi Arabia.
US officials said that they would introduce new sanctions against Iran if it continues developing its missile program, largely seen as a deterrent, or threat, to its Gulf neighbors in an increasingly militarized region.
Saudi Arabia and its allies have ignored calls from Washington to avoid escalating tensions in the region. On Sunday, the Emir of Qatar Tamim bin Hamad Al Thani is due to visit Russian President Vladimir Putin in Moscow for negotiations, rumored to be regarding Iran's new oil exports.