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Oil is already erasing Iran's nuke deal haul

P5+1 and Iran representative pose prior to the announcement of an agreement on Iran nuclear talks on April 2, 2015 at the The Swiss Federal Institutes of Technology
Fabrice Coffrini I AFP I Getty Images
P5+1 and Iran representative pose prior to the announcement of an agreement on Iran nuclear talks on April 2, 2015 at the The Swiss Federal Institutes of Technology

If you're fretting over the real impact of the pending nuclear deal with Iran and how it may lead to more state sponsored terrorism, the crude oil market has some good news for you.

Remember, the recent drop in world oil prices is really just a continuation of a major selloff that began last September. The more widely traded Brent Crude oil price hit a 2014 high of $115/barrel before the selloff began. After a pause and brief recovery for crude for much of 2015, we're now back down even further to about $45/barrel. Now keep that $70/barrel price decline in mind because I'll get back to it in just a moment.

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The Iran nuclear deal with the U.S. and five other major world powers gives Tehran access to billions of dollars worth of frozen assets. Just how many billions? It depends who you ask. Opponents of the deal insist the cash haul for Iran will be about $150 billion, while Secretary of State John Kerry insists just as strongly that it's more like $50 billion. Either way, that amount of money is alarming to everyone who believes some amount of that added money will indeed be used to fund international terrorism. Even President Obama has admitted that's where at least a portion of that money will go.

But let's get back to the price of oil. Iran currently exports 3.1 million barrels of oil per day. That's 1.1 billion barrels per year. And remember that $70/barrel decline in oil prices since last September? Multiply that by the 1.1 billion barrel per year figure and that's $77 billion off the table for the Mullahs in Iran. And that $77 billion is just about the median cash figure all the experts are guessing Iran will get access to if the nuclear deal goes through. It sounds like a bit of divine intervention for those who say the cash portion of the deal on its own should stop anyone from supporting it.

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In other words it's not a stretch to say the oil price drop has wiped out all, or at least a major part, of Tehran's expected added cash windfall from this nuclear deal. It means the overall revenues Iran could have reasonably expected to take in for the coming year are still going to be down compared to last year even with the deal in place and the sanctions lifted.

Does that mean lifting the sanctions will have no real effect? No. Even with the reduced financial benefits, opening diplomatic relationships of any kind gives the Iranian regime a big boost. And there's no proof any amount of reduced financial revenues will mean any reduction in Iranian state sponsored terror.

But from a purely financial standpoint, the crude oil markets seem to be stepping in just as the sanctions against Iran are stepping out.

Commentary by Jake Novak, supervising producer of "Power Lunch." Follow him on Twitter @jakejakeny.