In the near term, the removal of a trade embargo suggests that Iranian oil coming online represents even more supply to a market that is already failing to keep up with demand. With a strong dollar, the impact of open trade with Iran is only really relevant when concerning Iran's exports (oil).
A decrease in the cost of a good, for which most Americans have inelastic demand, is essentially like a tax-subsidy. The less that is spent on energy, the more that can be spent in other areas to boost the economy. That being said, energy prices have been relatively low for a year now, so it's hard to say how much they could fall or how long they can stay this low. In this case, price is a two-sided equation: supply (which is dynamic) and demand (which has been fairly consistent).
This type of event suggests lower energy prices which, in turn, could make it more difficult for domestic energy producers to remain engaged in production. The possibility of job-destruction in the US energy sector is a potential threat, but weighing this against the potential impact of lower energy costs has been a back-and-forth debate for which makes the US better off.
The Geopolitical component is basically impossible to predict. This is why it's important to avoid over-exposure to any one market, theme, country, or issuance.
-Adam Harding, CFP(R)
For informational purposes only, not to be considered investment, tax or legal advice.
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