The falling of the oil price, coupled with the lifting of sanctions on Iran’s crude oil, has seen the price slip to below US$30, cheaper than the barrels supposedly used to transport it.
A barrel of oil equivalent (BOE) is approximately 158.99 litres, or 42 US gallons.
The price slid below US$28 earlier this week, before settling just under US$30 per barrel of Brent crude, at US$29.65.
This marks a 12 year low for the oil price, and the recent lifting of EU embargos on oil from Iran is expected to exacerbate this situation.
“Sanctions relief will lead to an increase in Iran's oil production and exports, which had been subject to an EU embargo among other sanctions,” the US Energy Information Administration explained.
“Iran's crude oil production has been relatively flat over the past three years while sanctions were in place, averaging 2.8 million barrels per day (b/d) in 2015, representing 9 per cent of total crude oil production from the Organization of the Petroleum Exporting Countries (OPEC).”
With this extra production expected, some pundits are forecasting a price floor of as low as US$25.
Other things a barrel oil is now cheaper than:
– A carton of light beer: Cascade Premium at $37.99
– Pizza delivered to your house
– A can of olive oil
What other everyday thing is a barrel of oil cheaper than right now?