WASHINGTON – The tentative deal designed to limit Iran’s nuclear program led to a quick – though modest – decline in oil prices, raising the possibility that U.S. drivers may enjoy a prolonged break from high gasoline prices and creating an opening for Republican lawmakers to step up efforts to end a ban on exporting domestic oil.
Analysts at Washington-based ClearView Energy Partners noted that lifting economic sanctions against Iran could return as much as 1 million barrels a day to world markets, flows that have been cut off because of the economic sanctions imposed by the U.S. and other Western nations.
That new flow could depress world prices by as much as $12 below the $67 per barrel predicted by the end of 2016 by the Energy Information Administration, a forecast that assumed sanctions wouldn’t be lifted.
“We don’t want to belabor the obvious: The Iran deal is bearish for crude,” ClearView said in a note to clients.
EIA Administrator Adam Sieminski in April told the Senate Energy and Natural Resources Committee that higher Iran oil exports would either depress world prices by as much as $15 a barrel next year, or cause global production to slow.
The world price of oil is the key driver of U.S. gas prices. The national average for unleaded regular was $2.78 a gallon Thursday, according to AAA.