People are asking, “WHY NOW” for Donald Trump to crack down on Iran. This oil rich nation happens to be the world’s fifth-biggest oil producer. It is known why gas prices fell in 2006 when the nuclear agreement was struck with Iran. They ramped up their oil production by 1 million barrels per day after the sanctions were lifted in 2016. But what is going to happen now? But instead we should be asking why gasoline prices have gone up considerably within recent weeks prior to the U.S. pulling out the the Iranian Nuclear agreement. Crude oil topped $70 for a barrel this week for the first time since 2014. Because of increased oil prices, the cost of gasoline has gone up to an average of $2.81 when it was only an average of $2.34 twelve months ago.
So thank you Donald Trump. You have successfully taken away the tax break dollars that you gave to Americans with your flawed tax bill. The average for a barrel of oil will not go down any time soon thanks to Trump, and the gasoline pumps will reflect the upward trend in oil prices.
Saudi Arabia will take advantage of Trump’s actions. They claim that they are “committed to supporting the stability of oil markets.” But so far, they haven’t been able to keep gasoline prices down.
Another factor that will drive up the cost of oil and the price of gasoline are the tensions that are now brewing between Iran and Israel. Iran may attack Israel, and when that happens, gasoline prices will go up again.
The nuclear deal caused oil production to go up from 2.9 million barrels of oil per day in January 2016, to 3.9 barrels a day in April 2017.
There are other sources of oil to manufacture gasoline, but it will take time for other production such as US shale production to replace what is now readily available from Iran. There is a major surge brewing in what is considered America’s biggest oilfield, known as the Permian Basin, but that production will not be ready for another year.
So much for the plan of protecting American consumers of gasoline who depend on the oil from outside of the United States.