Detroit is quietly cheering the administration's nuclear talks with Iran, believing a deal would open the Arab nation’s oil spigots and cut U.S. gas prices to under $3, sparking a new truck and SUV sales binge.
G. Mustafa Mohatarem, the chief economist for General Motors, said that a deal, which presumably would lift economic sanctions in return for Iran giving up nuclear ambitions, could pour enough oil into the world system that the barrel price might drop to $80 from today’s $95.
And that’s music to Detroit’s Big Three which dominate the truck market. He revealed at a small economic forum sponsored by the U.S. Chamber of Commerce Foundation that current low gas prices have led to a six-month-long sales boost for trucks and SUVs.
“I expect gas prices ... to actually remain low and come down especially if we get the deal with Iran,” said Mohatarem. That deal is on hold amid criticism from Capitol Hill and Israel.
Mohatarem said that international supplies of fuel remain high even though four of the top six crude suppliers — Iran, Venezuela, Saudi Arabia and Nigeria — have cut production.
“If any one of the big producers comes back, and it looks like Iran will be the next one to come back online, you could have oil drop into the $80s and gasoline drop below $3 a gallon,” he said.Paul Bedard, The Washington Examiner's "Washington Secrets" columnist, can be contacted at firstname.lastname@example.org.