Economic analysis

Notley downplays oil price concerns after Iran nuclear deal

Alberta premier says lifting of sanctions could have 'a bit of a supressing effect on oil prices,' but points to resilience of economy

(Amber Bracken, The Canadian Press)

(Amber Bracken, The Canadian Press)

QUEBEC CITY, Que. – Alberta Premier Rachel Notley downplayed concerns Tuesday that the province’s energy sector may suffer if the Iranian nuclear deal leads to a drop in global crude prices.

Following a meeting with Quebec Premier Philippe Couillard, Notley said it’s possible the lifting of sanctions for Iran could have “a bit of a suppressing effect on oil prices for a period of time.”

“Like many Albertans, we talk about oil prices much like we talk about weather. And in both cases, we’re used to change,” she said in a teleconference call from Quebec City.

“Alberta’s a province that has been built on dynamic commodity prices and we’ve seen oil go up, we’ve seen oil go down and throughout it all, we’ve seen the resilience of our economic infrastructure. I’m convinced that regardless of the outcome, we’ll certainly work together with our industry to ensure that we’re able to come out of it as prosperously as possible.”

The oilpatch has been contending with low crude prices since last fall, and there are concerns that Iran’s nuclear deal could drive them down further.

The U.S. benchmark, West Texas Intermediate, changed little Tuesday. It hovered around US$53 a barrel, about half of where it was a year ago.

Iran is a member of the Organization of Petroleum Exporting Countries, but its oil production has been affected for years by sanctions over its nuclear program. Any easing of sanctions could see Iran sell more oil to the world market, which could bring down crude prices.

Notley said it’s too soon to say how the Iran deal could affect Alberta’s efforts to sell more of its oil to lucrative global markets, particularly in Asia.

“A lot of things … are going to happen internationally that have impacts on the price of oil, both good and bad, but we know generally speaking that market access has to improve,” she said.

In their first one-on-one meeting since the Alberta NDP’s election victory in May, Couillard and Notley talked about the cross-Canada Energy East Pipeline and climate change policy.

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