A landmark nuclear agreement with Iran was announced Tuesday and it could mean lower gases prices for Americans in the coming months.
Iran nuclear deal: What it is
The U.S., along with other world powers, made a deal with Iran Tuesday that calls for limits to the country’s nuclear program in return for lifting economic sanctions — sanctions that have prevented Iran from selling oil to the U.S. and other major Western countries for two decades. Instead, it’s been selling to China, India, Turkey and other markets. The new agreement will prevent Iran from producing enough nuclear material for an atomic bomb — for at least 10 years — and will impose required inspections of the country’s facilities and military sites.
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The Republican-run Congress now has 60 days to review the deal. And while many critics in Washington have spoken out against lifting the sanctions, President Obama has already said he will veto any move to block the deal from happening. More details on the deal here.
What it means for oil prices
Oil prices already dropped about 2%, but then jumped again, after the news of the agreement was announced Tuesday. But once sanctions are lifted and Iran is free to sell its oil on the world markets, that’s when prices may start to drop.
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‘Once we get past Labor Day, we should see gas falling by 10 to 15 cents a month,’ Tom Kloza, chief oil analyst with the Oil Price Information Service, told CNNMoney. ‘By December a lot of places are going to see gasoline at $2 or less.’
The average price for a regular gallon of gas in the U.S. is $2.78, according to AAA.