Oil To Surge To $70 By Year End Despite Iran Deal

July 20, 2015

Phil Flynn is senior energy analyst and a futures account executive at Chicago-based The Price Futures Group. He is one of the world's leading energy market analysts and a daily contributor to Fox Business Network, where he provides market updates and analysis. Flynn recently sat down with ETF.com to discuss the Iranian nuclear deal and the implications for the oil market.

ETF.com: World powers clinched a deal to curb Iran's nuclear program last week. Do you think ultimately it's going to be good for the world?

Phil Flynn: It's too early to tell, but you have to be a little bit skeptical because this Iranian regime is still dedicated to the destruction of Israel. They're an anti-Semitic regime that funds Hezbollah and other terror organizations. It's good to talk, but I'm just afraid that instead of stopping them getting a nuclear weapon, the deal may improve the odds of them getting a nuclear weapon.

You can be optimistic, pray that this regime has gotten a change of heart and it’s not the "death to America" regime that it’s claimed it is, but you’ve got to be skeptical: We’re talking about a regime that wants to wipe out Israel. I'd like to believe it wants to rejoin the world community, but its rhetoric doesn't seem to live up to that.

ETF.com: Do you think that there's a chance Israel would act on its own, militarily?

Flynn: It's possible. If you look at history, Israel took out Saddam Hussein's nuclear weapon capability early on, back in the '90s. At the time when it did that, it was criticized. It was only later on that people were happy that Saddam Hussein didn't have a nuclear bomb, especially after he decided to invade Kuwait.

ETF.com: Of course, there's going to be implications for oil from this accord. Do you expect Iran's exports to rise significantly? And what time frame are we talking about?

Flynn: A lot of people are predicting a flood of oil. I think it's going to be more of a trickle of oil. The Iranian production capability has been severely hurt. It claims it can bring on 400,000 barrels per day pretty quickly and add it to the global market.

I'm skeptical it can bring that much oil back online; that would be a best-case scenario. And in any case, before it can bring that back online, it still has to get through the IAEA weapons inspectors by Dec. 15.

The deal also has to get through the U.S. Congress, which has 60 days to review it.

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