Washington policy “gurus” may be underestimating President Trump once again.
Whether it’s pulling out of the Paris Climate Change agreement, or reversing former President Obama’s Cuba policy, policy analysts and talking heads have continually discounted Trump’s policy positions. Next up on the list of potential policy surprises: Revoking the Iran Nuclear Deal, according to Senior Energy Policy analyst Joe McMonigle.
“The consensus among the foreign policy community in Washington is that the deal will survive the Trump administration, and that they have no choice but to uphold the deal,” McMonigle says in the video above from The Macro Show this morning. “I don’t think the President has signed up for that at all.”
The result could cause a radical shift in oil prices, which are already down -23% year-to-date.
Since Iranian sanctions were lifted, as part of the nuclear deal, Iran has added about 1 million barrels per day to world markets, McMonigle says. If sanctions were re-imposed, that would remove those 1 million barrels per day from markets. “That would definitely impact [oil prices] in the positive, upward direction,” he says.
McMonigle provides additional detail in the video above, including why it doesn’t much matter if European governments sign on for re-imposing Iranian sanctions.