Leaders from Iran had welcomed a short-term deal over its nuclear programme to facilitate world powers allowance from sanctions targeting its key energy and financial sectors, which have crippled its economy. International Atomic Energy Agency (IAEA) was unable to confirm assertions of Tehran whether these nuclear activities are solely for peaceful purpose, since nuclear programme of Iran became public in the year 2002. According to the market experts, the landmark agreement Iran clinched with world powers on its unclear nuclear programme took effect from 20th January 2014. According to the U.S. President Barack Obama, he has no delusion on the difficulty of reaching a final agreement with Iran.
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Since November 2013, the news about Iran had almost been focused on the deal to limit that nuclear program of the country, Tehran agreed to curtail its nuclear drive for six months in exchange meant for receiving modest liberation from international sanctions and a promise by Western powers not to impose new measures against its hard-hit economy. According to the senior U.S. administration official, the first $550 million installment of $4.2 billion in frozen chattels was released early in the month of December 2013. As per the research analysts, unblocking the funds will breathe new life into the economy and provide much-needed relief across Iran.
The deal which is between Iran and the six world powers known as P5+1, anticipate the six-month suspension of certain sanctions on gold and precious metals, auto sector and petrochemical exports of Iran. Less than a month after Iran and the P5+1 countries reached a deal over the final nuclear program, the Iranian people and many international stakeholders are still waiting for economic sanctions on Iran to be lifted.
Oil, Inflation and the Auto Sector
After the lift of economic sanctions, global businesses are piling back into Tehran and for foreign firms the biggest prize in Iran is indisputably its sanctions crippled on oil and gas sector. During past nine months, Iran had sold $34 billion worth of oil and byproducts earning $32billion.
According to Leylaz, sanctions relief could strengthen the state assets in the long term and the annual revenue was estimated that it will rise by $20-25 billion dollars, which will help the government control inflation and will meet the demands of a population ravenous for more consumer goods.
Another big opportunity in Iran is the auto sector of Iran which had been essential for European producers before the sanctions hit. It accounts for 10% of its gross domestic product and is the second biggest industry after oil and is also likely to profit from sanctions relief.
According to the White House, during the six months of the interim nuclear agreement oil exports from Iran are to remain at the current level of about 1 million bpd. During the period from sales of petrochemicals, trading in gold and other precious metals and the improved transactions with foreign firms involved in the automotive sector will estimate that Iran will mount up to $1.5 billion.
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good insight.....
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