Jim Cramer: Why we're headed back to pre-Iran war oil prices and what it means

U.S. oil could soon be back to around pre-Iran war prices, Jim Cramer predicted Tuesday, as crude dropped to its lowest levels in three months. A sustained decline in oil prices would reverberate positively through the economy. "We're not going to $77, I think we're going below $70," Jim said on CNBC's " Squawk on the Street ." When pressed on the timing, Cramer responded: "One month." West Texas Intermediate crude, the American oil standard, dropped sharply again Tuesday, going below $76. WTI extended Monday's nearly 5% decline after the U.S. and Iran reached a memorandum of understanding to end their conflict. The deal is expected to reopen the Strait of Hormuz as early as this coming Friday, easing concerns about disruptions through one of the world's most important oil shipping routes. @CL.1 YTD mountain WTI crude YTD WTI finished around $67 on Friday, Feb. 27, the day before the Iran war started. It soared and settled above $71 on the first trading day on Monday, March 2. A week later, it briefly spiked above $119 to a four-year high. WTI quickly backed off those extreme levels, but remained elevated for months. With back-to-back declines on hopes for an Iran solution, following drops last Thursday and Friday, WTI's war-premium is down to about 13.4%. Cramer said the crude selloff reflects a supply picture that has shifted faster than many investors expected. …