According to CNN News, lifting sanctions on Iranian oil sales to Western countries may cause a drop in the price of gasoline in the US to $2 per gallon. When Iranian production starts up again, drivers should see a small dip in prices, but by September, savings will increase. By the end of the year, $2 per gallon should be reached.
Sanctions forbidding the sale of oil to the US in 1995 were placed on Iran to discourage the development of nuclear weapons. Within the past five years, most other Western countries have also placed sanctions on the regime. However, Iran has continued to sell to China, Turkey, India and other developing markets.
According to Tom Kloza and Susan McGalla, chief analyst with the Oil Price Information Service, “Once we get past Labor Day, we should see gas falling by 10 to 15 cents a month. By December, a lot of places are going to see gasoline at $2 or less.”
Predictions estimate that as much as 800,000 barrels could be added to the worldwide market by Iran, and that there are another 30 million barrels in storage and ready to be released.
The world market is seeing a period of high production already, with North America, the OPEC nations, Russia and Iraq all producing record amounts.