What Trump's Iran decision means for Baton Rouge gas prices

Losing significant volumes of Iranian exports as a result of sanctions will worsen the existing under-supply in the market and cause inventories to decline even faster and prices to rise even higher.

Iran ramped up its oil production by 1 million barrels per day after sanctions were lifted in early 2016.

That could hold prices down in a market that has already been short on supply because of production cuts by OPEC and Russian Federation.

Trump slammed the Iran nuclear deal as a "horrible, one-sided deal" that was "defective at its core".

It took almost three years to happen, but oil prices finally did it. Crude topped $70 a barrel this week for the first time in almost four years.

Crude oil prices swung wildly on Tuesday, eventually climbing back above $70 a barrel later in the day. A gallon of gas went for $2.34 a year ago.

"The average family out there can expect to pay about $200 more than they paid last driving season and about $250 more than the 2016 driving season", says Kloza.

OPEC members need to start reacting now if they intend to avert an escalation of prices, rather than leaving the decision to December, by which time the market will be exceptionally tight and it will be too late.

Walking away from the deal means the United States will likely re-impose sanctions against Iran after 180 days, unless some other agreement is reached before then. Saudi Arabia, OPEC's most important member, is pushing to extend the production cuts beyond this year.

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Among the steps that could allow Saudi Arabia to tackle potential oil shortage the spokesperson said cooperation with oil producers from both the OPEC and from the non-cartel nations.

"President Trump is clearly articulating that he has minimal desire in an alternative agreement with Iran", said Ehsan Khoman, head of research for Middle East and North Africa at Mitsubishi UFJ Financial Group.

Several US military officials told CNN that there are increasing concerns Iran is on the cusp of an attack against Israel.

"The three or four-year period of quiet in terms of geopolitics impacting oil markets is over", said Canary's Eberhart.

Iran re-emerged as a major oil exporter in 2016 after worldwide sanctions against it were lifted in return for curbs on its nuclear program, with its April exports standing above 2.6 million barrels per day (bpd).

OPEC agreed to reduce output by about 1.2 million barrels per day in the deal.

Global buyers of Iranian oil have until November 4 to wind down contracts before the US reimposes sanctions on the oil, energy, shipping and insurance sectors, according to a US Treasury Department fact sheet.

Industry insiders say the scope of the impact will be determined by a range of factors, including how much Iranian crude is restricted by the sanctions and whether other major producers can fill the gap.

"Short of war, the only way Iran's crude sales could be disrupted is if European and certain Asian buyers revert back to their pre-2015 embargo policy - and there is virtually zero chance of that", Raymond James energy analyst Pavel Molchanov said in email.

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