On Friday, oil prices dropped to below $30 per barrel, the lowest it's been in over 10 years. On Saturday, the Iranian government released four Iranian-American prisoners. And possibly, sometime within the next few weeks, Iran will officially be allowed to provide oil to the world market, which they were barred from doing when the European Union issued an embargo on Iran four years ago.
So what about the nukes, and how are any of these things related?
The linchpin that ties all of these seemingly disparate objects together is the infamous Iran Nuclear Deal, which would essentially allow Iran to develop their nuclear program so long as they agreed to very high levels of supervision.
Prior to international diplomacy and discussion of the Iran Nuclear Deal, sanctions issued by the United States, the European Union, and the United Nations severely limited Iran's accessibility to the global market. With the "fourth largest oil reserves in the world," the inability to export oil to large national markets (i.e. the U.S. and EU/UN countries) was extremely detrimental to Iran's economy. In anticipation of agreements, Iran has been "behaving better," which is the primary reason the government released the Iranian-American hostages.
In talks about the Deal, however, the Iranian government has stated that they will only agree to the Deal so long as all of the sanctions (which, over the years, have come to limit more than just just their energy/oil industry) are lifted.
What does this mean?
Iran is about to flood the global market with oil. Saudi Arabia, as the current leader in oil, doesn't want to face more competition. Therefore, in order to keep Iran out of the market, the Saudi government is going to maintain or possibly increase the amount of oil they export so that other countries don't buy oil from Iran. This would, ideally (for Saudi Arabia) mean that Iran's oil endeavors would fail, and Saudi Arabia would retain their hold on the global oil market.
Who's affected?
In order to remain competitive, oil-exporting countries will keep the price of oil relatively low. For the average Joe filling up his Camry at his local Chevron (or the college student paying the pump with more dimes than dollar bills), this is good news.
For areas whose oil exports make up their primary source of income... Not so much. This includes countries in the Middle East like Saudi Arabia and Qatar, but it would also include regions in the American Midwest, Alberta, Venezuela, Libya, etc.
There are many factors to consider going forward. The proliferation of Iran's nuclear program, potential fluctuations in the price of oil, Iran-U.S. relations, Iran-Saudi Arabia relations... The list goes on. We can only hope that these issues are resolved as quickly, peacefully, and justly as possible.
