Iran lied. Big time. Oil prices were fading before Israeli Prime Minister Benjamin Netanyahu announced he was going to share a “significant development” on the Iranian nuclear deal. That comment turned oil around in its tracks, with a little help from Genscape that showed supply in Cushing Oklahoma fell back significantly from the increase they reported last week.
Oil surged as Israeli Prime Minister Benjamin Netanyahu spoke, calling out Iran for lying to the international community and announcing he had documents that had been smuggled out of Iran that proved Iran is still working on its nuclear program. He said that he was “here to tell you one thing: Iran lied. Big time.” He said that “After signing the nuclear deal in 2015, Iran intensified its efforts to hide its secret nuclear files. In 2017, Iran moved its nuclear weapons files to a highly secret location in Tehran. This is the Shahabad District in southern Tehran. This is where they kept the atomic archives. Right here. Few Iranians knew where it was, very few, and a few Israelis. A few weeks ago, in a great intelligence achievement, Israel obtained half a ton of the material inside these vaults. And here’s what we got. Fifty-five thousand pages. Another 55,000 files on 183 CDs. Everything you’re about to see, is an exact copy of the original Iranian material.”
He said “Project Amado’s explicit goal was: creating nuclear weapons. This is an original Iranian presentation from these files, and here’s the mission statement: Design, produce and test five warheads, each with ten kiloton TNT yield for integration on a missile. You don’t need to read Faros to read 10 kilotons here. TNT. This is the specific goal of Project Amid. That’s like five Hiroshima bombs to be put on ballistic missiles.” Then after the speech oil seemed a bit less impressed.
He also spoke about the Fordow Uranium Enrichment Facility. This was a secret underground enrichment facility that the Iranians built under a mountain. You don’t put thousands of centrifuges under a mountain to produce medical isotopes. You put them there for one reason: enrichment for nuclear weapons. But the files show that Fordow was designed from the get-go for nuclear weapons as part of Project Amad.
Obviously, it showed that Iran did lie about their attempt at a peaceful nuclear program, but the only one who believed that anyway was the Easter Bunny and Santa Claus. The real question is whether this will rally other European nations around Israel’s idea and President Trump’s idea that they should back out of the Iranian nuclear accord.
Israeli Prime Minister Benjamin Netanyahu is under considerable political pressure back home and the release of the information comes just ahead of President Trumps decision on whether to back out of the deal that he has said is a horrible deal.
Oil is pulling back a day after the speech as many feel that the speech did not have the smoking gun info that will shake the P5+1 partners. Then we get back to oil supply and demand. We know that globally the glut is gone, and it has happened because of strong demand and the lack of investment in traditional oil projects.
A few years back when we predicted a new bullish era for energy we were in the minority as the street overestimated shales ability to replace OPEC cuts and traditional oil production decline rates. We warned about the coming shale bottlenecks and we warned to not underestimate OPEC resolve in cutting production. We warned that major reporting agencies were underestimating demand. We predicted a new super cycle in oil as well as a generational low. We called for $60 a barrel of oil last year, which hit and our call for $80 this year still stands. There are a lot more bulls joining my call. Being bullish is not nearly as lonely as it was a few years ago. The new era in oil is here! Get on board.