Two big deals were signed this week, with one thing in common - can-kicking. The Eurozone countries, more precisely Germany, kicked the Greek debt can down the road for three years by lending the already over-indebted country another €86bn. And the P5+1, the permanent members of the UN Security Council + Germany, kicked the problem of a nuclear-armed Iran down the road for what they hope will be at least ten years by agreeing to remove sanctions in return for a temporary halt in the theocracy's drive for a nuclear weapon with which to cow, or worse, Saudi Arabia and the Gulf states, and annihilate Israel. "In Iran, both reformists and conservatives welcomed the deal, regarding it as a victory that will turn Iran into a regional power," reports the Financial Times.

       This latter deal is now before the US congress. The math is on President Obama's side, since he will veto the likely Republican rejection, and it will take only a one-third vote in either house to sustain his veto. Then will come a series of steps that will eventuate in an irreversible winding down of the sanctions regime that brought the Iranians to the bargaining table in the first place - never mind the President's claim that sanctions will snap back if Iran plays fast and loose with its commitments --  and an end in five-to-eight years of the UN sanctions that have prevented Iran from buying arms and intercontinental ballistic missiles to "refresh" its military's weaponry, to borrow a word from defense experts. By that time Obama will have long since left the implementation of this "legacy" item to his successor(s), and will take a deserved victory lap if Iran has become a member in good standing of "the community on nations", and blame his successors' faulty implementation if Iran is caught cheating and sanctions do not somehow snap back. By then, John Kerry will have his Nobel Prize, and the Quds their new toys.

       The deal has brought smiles to boardrooms around the world. German vice-chancellor Sigmar Gabriel will be leading a trade mission to Iran; auto companies see a huge untapped market for vehicles and spare parts; manufacturers of commercial aircraft see a demand for some 300 planes over the next decade to replace the existing aged fleet that has one of the world's worst safety record; and American companies plan to capitalize on the fact that U.S. brands are enormously popular with Iran's young consumers, although with youth unemployment at 25% it will take time for these potential consumers to have enough disposable income to turn desire into effective demand.   

     Among the businesses most affected by the opening of Iran to the global economy are arms manufacturers and oil companies. Iran's youths might be interested in jeans and Cokes, but the regime is interested in weapons and oil sales. The mullahs will have available some $100bn in unfrozen assets. Obama believes the regime will use those funds to improve the lot of its millions of young people, but critics say it will more likely use that the money to expand Iran's elite cybercorps, provide Hezbollah and Iran's other terrorist proxies with more fire power, shore up Syrian president Bashar al-Assad, and to purchase arms for its Quds Force, which handles operations outside of Iran and is dedicated to the destruction of Israel, a dedication of which it reminds its followers on annual Quds Day. Russian arms merchants are expected to be the leading suppliers.

The newly available $100bn dwarfs the mere $500 million Iran was able to spend on arms last year, as well as the purchases of Iran's sworn enemies -- $7bn for Saudi Arabia, $4bn for the UAE and $1bn for Oman, according to Ben Moores, a defense analyst at IHS Jane's. Moores also notes that Iran will be playing catch-up with the size and quality of its enemies' militaries. Those adversaries won't cede their advantage easily. Israel and the Arab nations will step up their weapons procurement, to the likely advantage of American and European manufacturers. In addition, the Saudis, confronted with an Iran that will have nuclear weapons, will be shopping in Pakistan for its own nukes. It's called an arms race, and in a region in which irrationality might well top the restraining force of Mutually Assured Destruction. Iranian leaders once calculated that a nuclear exchange with Israel would wipe out that small nation's population, but leave Iran with a population of over 70 million.

       Then there is the oil industry. Some 25 experts from academia, government, and the energy and financial sectors gathered at the Belfer Center of Harvard's Kennedy School late last month to consider "The Energy Implications of a Nuclear Deal between the P5+1 and Iran". They agree the deal will have little immediate effect on oil markets since Iran requires significant investment - some $200 billion by one estimate -- if it is to raise output above its current level of 2.8 million barrels per day (mnb/d), 1.1mn barrels of which are exported. But despite the widespread corruption and the fact that the World Bank ranks Iran 130 out of 189 countries in ease of doing business, Total, ENI and Shell are poised to make that investment in the hope of balancing their high-cost assets in Canada's oil sands, the Arctic and in deepwater regions with lower-cost Iranian crude. The Iranians would also like to see some US companies come in, probably to give US oil industry executives a financial stake in arguing America out of any attempt to respond effectively to Iranian breaches. The International Energy Agency earlier this week estimated that within months of the lifting of sanctions Iran could boost output by between 600,000 and 800,000 b/d, to as much as 3.6mb/d. Bijan Zangebeh, Iran's oil minister, looking a bit further ahead, claims his country will increase production to 4mb/d by the end of 2016 and to 5mb/d by the end of the decade.

     The Saudis are unlikely to cede market share without a fight and are preparing to ramp up production from its current record level of 10.6mb/d (inflated in part by high electricity production in the hot summer months) to 11mb/d. Meanwhile, the fracking and technology revolutions are driving production costs ever-lower, allowing US producers to maintain and even increase output in the face of a declining rig count and prices recently thought to be below frackers' costs.

With China experiencing considerable difficulty sorting out its share and credit markets, and the EU economy sputtering, demand for oil remains weak. The experts at the Harvard conclave think Iran's increased exports will result in crude prices $10 lower than they would have been next year had there been no deal. And after the summer driving season ends on Labor Day, gasoline prices should drop 10-15 cents each month: "lots of places are going to see gasoline at $2 or less", predicts Tom Kloza, chief oil analyst with Oil Price Information Service. That is $1 per gallon below the current price of mid-quality gasoline. Joe LaVorgna, managing director and chief US economist at Deutsche Bank reckons that every one-cent drop in the price of gasoline reduces average US household energy expenditure by $1bn, so if Kloza is right that we are about to see something like a $1 plunge, we  Americans will enter 2016 with $100bn more to spend on whatever suits  our fancy.

       Unless.... It is possible that the price cuts consumers are hoping for will not materialize. For one thing, the deal with Iran might encourage its many enemies to strike before it becomes a nuclear power, which would prompt the regime to attempt to close the Straits of Hormuz to shipping, driving crude prices up. For another, in the face of an oil glut and low prices, peace might break out among OPEC members, who could agree to the reintroduction of quotas and cut back production.

       My view is that neither of those possibilities is likely to occur. The Saudis have no taste for mounting an attack on Iran, since it would threaten an upheaval in the Kingdom that would send the thousands of members of the royal family scrambling for accommodation in the Dorchester hotel in London, an Arab oasis in summer and times of crisis. And the Israelis will have to wait until Obama is out of office before acting, as he would react to such a spoiling of his treasured "legacy" by cutting off military supplies to the world leader he most detests, Israel's Benjamin Netanyahu. As for an OPEC revival, it is likely that the Saudis, who can make money at very low prices, will prefer to continue to squeeze American frackers and to face Iran with prices so low that the discounts they are said already to be offering would take prices below their costs.