iran-oilRemember in Economics that it takes two to tango. Last week we talked about Global Demand as Greece draws the EU into economic turmoil, Japan & Puerto Rico could draw the West into economic turmoil, and China could shake global turmoil. The other side of the equation is Supply. Econ 101, Supply and Demand intersect at equilibrium and give us price and quantity, so just as equally important to demand is supply, and with oil and refined products from Iran openning up to the world market, the Global Supply will be going up as Global Demand will likely be going down.

Officially on the 14th of July despite strong odds the week prior, the United States along with five other world powers sealed an historic accord with Iran to curb their nuclear program in return for ending sanctions after two years of tough diplomacy. The accord is the biggest breakthrough in relations with Iran in decades, and will open up Iranian oil reserves to the World Market.

Full implementation depends on Iran meeting obligations to curb its nuclear program, and once inspectors verify compliance, Iran will be allowed to ramp up energy exports and re-enter the global financial system. It is estimated that as much as much as $150 billion in assets have been frozen due to the Nuclear Sanctions. The entire GDP of Greece which has been dominating headlines is “only” about $330 billion, so it is a major windfall for Iran (and the World) when their assets are unthawed.

“This is probably going to go down in history as one of the biggest diplomatic successes of the century,” Said, Ellie Geranmayeh, a policy fellow at the European Council of Foreign Relations. President Barack Obama said it blocks “every path to a nuclear weapon” for Iran, while Iranian Foreign Minister Mohammad Javad Zarif called it a “win-win” solution, as Israel remains one of the few vocal opponents to the accord.

Though having $150 billion back in the pocket of Iran will not have the same effect of putting $150 billion free and clear into say the pockets of the Greeks, it will none the less open Iran up to global spending after being dark to the world for the last two years. Not only will Iran be spending money with the rest of the globe, but the globe is eager to spend money in Iran. Iran has been a widely untapped market. Iran is a country of 77 million people, and it has been one of the most sealed off countries in the world. Iran has been closed to major outside equity investment, and the Iranian stock market could open to investors in early 2016.

It will likely take six to 12 months for the holder of the world’s fourth-largest crude reserves to revive production by about 500,000 barrels a day. Sanctions cut the country’s crude exports by more than half from a peak of more than 6 million barrels a day in the 1970s, but this is a major step in ramping back production.

The agreement of the six countries will allow the US and EU nations to buy Iranian oil and also eases curbs on trading refined products, chemicals and natural gas. Not only is this a big boost (Bear to prices) of oil, but to natural gas as well. Iran holds the second-largest gas reserves in the world, after Russia, and opening investment in the natural gas production and infrastructure could dramatically change the shape of the European energy picture as cheap and readily available natural gas could change Asia and Europe with the same force that the shale boom has changed North America.

Natural Gas could be as important, or more important to the world as oil. The natural gas landscape is quickly changing as fracking and shale gas in North America has forever altered prices and demand for gas. The “Economist” ran another in-depth article on the ripple impacts of lower oil and gas prices on the US shale industry and the viability of the industry debt repayment. Opening up Iran to a world market will only further put downward price pressure on prices and viability of shale debt.

The Deal still has a long way to go, as US Congress and Israel still are possible roadblocks, but this a major step into injecting a major supply of oil, natural gas, and refined products into the Global Marketplace.