The deal’s implementation is pending approval from the US Congress and the Iranian Majles (parliament), as well as the implementation by Iran of nuclear-related measures described in the deal.
Isolation from the global banking system and the loss of oil revenues have cost Iran’s currency, the rial, two-thirds of its value against the dollar since sanctions were tightened in 2011. Prices of basic foods and fuel, in particular, have soared. Even though there are restrictions against advertising on the streets of Tehran, companies will try to entice consumers from Iran by advertising in more liberal countries, such as the Gulf States, and Europe. There were some verbal conversations and nothing more. Sanctions imposed on Iran for its support for terrorism or human rights abuses do not form part of the deal.
The other suggested opportunities for oil-importing countries in the current scenario are, one, to boost research into extracting shale oil more efficiently and in renewable sources of energy.
Helen Dalziel, senior market services executive at the global Underwriting Association, said the British Treasury had issued a notice to insurers saying its previous guidance remained in place. This is, by some estimates, the highest rate of “brain drain” in the world. Removal of sanctions will persuade some educated Iranians to take their chances at home.
Iran, which has the world’s fourth-largest oil reserves, has seen its production fall to less than three million barrels per day (bpd) since 2012. Iran already produces 2.8 million barrels per day. This means that Iran definitely has the potential to become a major player in the natural gas market once the sanctions are lifted.
According to the bank’s commodity research team, as sanctions are unwound, the National Iranian Oil Company would ramp up production to pre-2012 levels of 4.5m barrels of liquids by 2020 and maintain this with limited development of new fields.
French carmaker PSA Peugeot Citroen quit Iran – its second-largest market – in early 2012, but is now discussing a renewed partnership with Iran Khodro. Turkey, the United Arab Emirates, and Oman will reap the first obvious gains from trade with and investment in Iran.
Companies immersed in luxury goods, such as Hermes, Kering, and Prada, also stand to benefit. The study revealed that there could be LNG assets worth 3 billion that might not be needed over the next decade.
West Texas Intermediate crude for delivery in August slipped two cents to $50.89 a barrel on the New York Mercantile Exchange. In addition, Iran’s transportation minister has announced that the country will need to replace as many as 400 commercial aircraft over the next 10 years; that’s at least $20 billion in potential revenue for foreign aviation companies like Airbus and Boeing.
Deutsche has yet to reach a settlement with US officials over suspicions that it may have breached sanctions in dealings with Iran.
TANAP is projected to start delivering natural gas in 2020, and Iran could use this pipeline network for gas exports, although it will require the construction of infrastructure, such as gas compression stations. As sanctions relief injects more money into the Iranian economy, this rivalry will intensify. The direct implications for India’s energy security largely flow from the opening up of the Iranian hydrocarbons sector, the availability of these hydrocarbons to India and their cost. Tehran also found ways to funnel $1 billion to $2 billion a month to prop up the Assad regime in Syria.
But there are significant exceptions to Iran’s reopening.
