Global and U.S.- CNN, CBS, BBC, Al Jazeera
By: Rebecca Lee Robinson
The Nuclear deal made with Iran is looking like a mixed bag for the U.S. market. Since making the deal, U.S. gas prices have declined and are expected to decline into the fall, making travel and basic expenses for the average American more affordable, at a cost to national oil production. While imports of nuts may decrease the cost of pistachios it could also hit U.S. pistachio farmers with more competition on the market.
Chico Harlan with the Guardian and Washington Post reported on July 21st that with Saudi Arabia and Iran selling oil at a cheaper price, the flooding of the market has taken a toll on U.S. oil production. Oil giant, Continental Resources lost more than one-third or $6.5billion of its company’s value in the last six months. Continental and other companies are behind the hydraulic fracturing industry in the United States, which was meant to remove U.S. markets from “Saudi Arabian control” and have dominated the market for the last 40 years.
Previously, when oil prices fell Saudi Arabia and other oil-rich countries would pull back on production, to allow prices to rise. In recent times an increase in U.S. production has only led to Saudi Arabia also producing more energy. This has created a plummeting oil value and putting U.S. drillers at risk due to their reliance on higher oil prices and has lead to mass lay-offs in the U.S. oil industry. Ryan Lance, chairman and chief executive of ConocoPhillips, stated at a recent conference in Huston, Texas, “The industry is in a bit of survival mode.”
According to Steven Mufson of the Washington Post, though gas may become less expensive, U.S. gas companies may be left behind as European and Asian companies explore the world’s fourth-largest oil reserves of Iran. Many of these companies will likely be returning businesses that left when sanctions were put into place, such as Italy’s Eni, Norway’s Statoil and France’s Total. Robert McNally, a former advisor to George W. Bush believes that “Barring a political moderation in Tehran, it is very unlikely the politics will improve enough to allow U.S. oil companies to go back in.”
The sanctions on Iran being lifted mean some perks for Europe, Asian and American markets. Some trade sanctions will stay in place, but others will be lifted on civilian aviation equipment (including passenger planes), food and carpets. The aviation equipment alone could be of huge benefits to Boeing.
Food imports will also decrease the cost of pistachios and caviar, two big Iranian exports. Yet even though pistachio prices could decrease, this may hit American farmers who have been producing and selling the nut in recent years.