NEW YORK ( TheStreet) -- Obama's nuclear deal with Iran may be more than just a source of ideological frustration for the Republican Party: If one highly successful presidential election model is to be trusted, the deal may have already cost the GOP the 2016 election.
The Moody's Analytics presidential election model, which is currently predicting a Democratic win in 2016 by a razor-thin margin of 270 to 268 electoral votes, has correctly called every race since the 1980 match-up between Ronald Reagan and Jimmy Carter. Its perfect batting average is due to its state-based, as opposed to nationally based data, as well as a carefully tuned mix of economic and political variables.
Key among them are gasoline prices. When gas prices are high, consumer confidence tends to be low and the incumbent's party gets docked points. Vice versa for when gas has gotten cheaper.
And gas has gotten cheaper -- a lot cheaper -- thanks most recently to the preliminary accord between U.S.-led Western powers and Iran. If the deal gets ratified, it's expected to put between 20 and 40 million barrels of stored Iranian oil up for sale instantly, adding to the worldwide supply glut that has slashed regular retail gasoline prices by 25% over the past year, to $2.63 a gallon from $3.47, according to the U.S. Energy Information Agency. (The world currently produces roughly 80 million barrels of oil per day.)
Once the Islamic Republic's oil industry is back up to full production levels, an additional million barrels of oil per day could find their way onto international markets, driving crude and gasoline prices even lower.
"Without a doubt, the Iran deal is making oil cheaper," said oil trader Michael Hiley of brokerage firm LPS Partners in New York. "It's tough to put a specific number on it, but it's being built into the market and everybody knows it."
The question is to what extent oil markets have already priced the influx of Iranian oil in. In the week after the deal was announced, crude dropped more than 9%, to $48.45 a barrel from $53.48. Rumors of the deal, however, began to circulate in early July, driving the commodity down almost 19% on the month.
There's no guarantee, however, that the price rout would end there. Full ratification of the deal by the U.S. and European governments could prompt further price dips as Iranian oil becomes a normalized commodity on the open market.
On the other hand, if Republicans are able to block the deal in Congress, a spike in crude and gas prices is all the more likely -- and with it, a Republican advantage in the election. Congress is likely to vote on the deal in October, almost exactly one year before the election -- perfect timing for gas prices to start rising and influencing voter sentiment, as far as the GOP is concerned.
Chances of this, however, are seeming more and more remote, both for political reasons and economic ones.
"It looks increasingly likely that there will be a finalized deal with the Iranians over their nuclear program," Moody's economists Mark Zandi, Dan White, Chris Lafakis and Michael Brisson conclude in the white paper they released with their election model results, "which means Iran will soon be pumping more oil."
Even if it doesn't, and even if prices begin to rise, there's little reason to think that the perfect storm of geopolitical factors that has devalued oil over the last year is going to subside in time to make a difference for the Republican Party.
Lagging demand from China, high-powered production from the U.S. shale and a refusal by the Organization of Petroleum Exporting Countries to cut their own production numbers have all depressed the price of gasoline as much as fears over the Iran deal. It would take relief on more than one of these fronts to turn oil prices into an advantage for the GOP.
Low gas prices -- simply put -- "favor the incumbent democrats," say Zandi and his co-authors.
Despite the prediction model's impressive track record, Zandi is quick to point out that no economic model is totally reliable. "Some states have better data than others," he told TheStreet in an interview.
The model is also susceptible to problems of "collinearity," which occur when independent variables are actually covertly related, leading to redundancies in the calculation. Additionally, the price of oil is by no means the only factor at play in the Moody's model and the election in general. Housing prices, voter fatigue and especially personal income growth, which could all change before election day, have major roles in the model, as well.