Trump’s abandoned Iran deal has forced live oil prices to skyrocket
Trump's withdrawal from Obama's Iran deal and reinstated nuclear sanctions have reportedly caused live oil prices to increase drastically. On Tuesday, May 8, President Donald Trump declared that the United States will withdraw from a proposed deal with Iran over nuclear power, despite fears that this would further isolate the US from its western allies.
The Iran deal, which was one of the Obama administration's primary foreign policies, was dismissed by Trump as: "A horrible one-sided deal that should have never, ever been made." To the dismay of many diplomats, Trump added that he intended to reimpose the sanctions imposed on Iran prior to 2015. The consequences of this decision have already been extreme, with live oil prices skyrocketing to $77 per barrel of bent crude.
Iran increased the production of oil, much of which was then exported, to approximately one million barrels per day, after the economic sanctions which had hamstrung the economy were lifted. By April 2018, it was producing around 3.8 million barrels of oil per day. In addition to this, according to a report by AAA, gasoline prices in America have leapt to an average of $2.81 per gallon compared to an average price of $2.34 per gallon in 2017. This means that the average American family will spend an extra $200 on gas this summer.
However, there are other factors to consider this steep rise, including production cuts by Russian wells, and instability in Venezuela. However, it seems as though Trump's dismissal of Obama's years of painstaking negotiations has exacerbated the situation. Iranian president Hassan Rouhani claims that Iran will abide by the terms of the deal, but has expressed disappointment that sanctions have been brought back.