Analysts say Iran deal will lead to gas cheaper than $2
NEW YORK - Analysts say thanks in part to the Iran nuclear deal, drivers in the U. S. could see gas prices drop below $2 a gallon by this fall.
CNN reports that Iran hasn't been able to sell oil to the U. S. since 1995, and other nations followed suit with sanctions aimed at curbing Iran's nuclear ambitions. The nation kept selling its fuel to China, India, Turkey and other developing markets however.
If those sanctions are fully lifted in the next few months as part of the recently-announced nuclear deal, Iran could contribute as much as 500,000 barrels of oil per day to the worldwide markets by the end of the year. Even if Congress votes to not approve lifting the sanctions, which President Barack Obama has said he will veto, adding that oil to the European markets will still push down prices worldwide according to analysts.
"Once we get past Labor Day, we should see gas falling by 10 to 15 cents a month," said Tom Kloza, chief oil analyst with the Oil Price Information Service. "By December a lot of places are going to see gasoline at $2 or less."
Oil production is also still booming from North America, OPEC, Russia and Iraq, which is adding to the large supplies on the world market. Demand is also being curbed by events in Europe and China. Iran's contributions would only add to those supplies, as will the 30 million barrels estimated to be in storage and ready for sale according to FACTS Global Energy, an industry consultancy.