Iran Deal News: US Nuclear Deal With Iran Could Bring Gas Prices to $2 Per Gallon
The U.S.-Iran nuclear deal, which President Barack Obama announced Tuesday, could add 1-million barrels of crude oil to global markets and bring gas prices in the U.S. down to $2 a gallon.
Following weeks of negotiations in Vienna, the U.S. and five other world powers reached an historic agreement with Iran, which places limits on its nuclear program for the next 10 years and its research for the next 15 years, reports CNN. In exchange, the world powers agreed to ease economic sanctions on Iran. As a result, Iran will be able to sell oil to the U.S. once again, which could result in major savings for U.S. drivers.
"Once we get past Labor Day, we should see gas falling by 10-15 cents a month," said Tom Kloza, chief oil analyst with the Oil Price Information Service, according to CNN Money. "By December a lot of places are going to see gasoline at $2 or less."
Although Iran has the fourth biggest oil reserve in the world, it has not been able to sell oil to the U.S. since 1995 due to sanctions. However, now that the sanctions will be lifted, Iran will be allowed to add as much as 500,000 barrels of oil per day to worldwide markets by the end of the year.
"[Iran] will only add to the oil glut on the market and increase the selling pressure," wrote Naeem Aslam, chief market analyst at Ava Trade.
FACTS Global Energy also estimates Iran has about 30 million barrels of crude currently in storage and ready for sale.
As of now, gas prices in the U.S. average at $2.78 for a gallon of regular at a station, according to AAA. Meanwhile, the last time that American gas prices dipped below $2 at most gas stations was during the winter.
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