Recently, I wrote on these pages that a remarkable turnaround was taking place in the President’s fortunes. It’s an impressive display of rising from the depths of falling popularity last fall, and it is starting to be felt in many areas, with major impacts on the future of energy.
At his lowest point, the U.S. President was widely regarded as a lame duck, shedding influence and power, and on a downhill slide.
The value and planned release of Iran’s frozen foreign assets have become hot political topics in both Tehran and Western capitals. Yet few observers, it seems, have a clear idea how much is likely to be released because of the nuclear deal, and political motivations of one kind or another seem to be behind the varying estimates.
Conflicting accounts
Inside Iran, there have been several conflicting statements about the total volume of these funds ever since the announcement of the historic nuclear deal with the West on July 14.
According to the deputy governor of Iran’s central bank, the economy could grow up to four percent, according to Reuters. Iranian leadership reached an agreement with the international community over the state’s nuclear ambitions. The deal will also lead to a revival of the nation’s fledgling oil and gas industry.
One can summarize the potential for US business to engage with Iran one sentence: Iran exports crude oil but imports gasoline. Why? The Iranians lack sufficient capacity to refine their own oil for domestic use.
This bizarre fact underscores how, hemmed in by sanctions and the limited worldview of their theocracy, Iranian technology and installed equipment is years, even decades, behind the West – not just in the energy sector, but across the board in most industries.
The Islamic Republic of Iran boasts the world’s fourth-largest oil reserves, second-largest gas reserves, and the 29th-biggest economy, estimated at US$415.3 billion in 2014. Its gross domestic product is growing about 3% a year despite the crippling impact of decades-old sanctions.
Not surprisingly, then, potential economic gains are prevailing over military, terrorism and human rights concerns in shaping responses to the historic deal agreed to this week between Iran and six major world powers (P5+1).
For years, the Iranian economy has been slowed thanks to crippling sanctions imposed by the international community designed to discourage Iran from pursuing its nuclear ambitions. On Tuesday, the Middle Eastern nation finally came to terms with international negotiators working on a long-anticipated treaty regarding giving up the development of nuclear weapons in exchange for lifting economic sanctions.
Last week saw an accord reached between the P5+1 and Iran regarding the latter’s nuclear programs. Part of the agreement included lessening sanctions imposed against the nation that have seriously impaired its economy. Analysts believe this could lead to a serious turnaround of the Iranian economy, but how much growth will this really mean for the embattled Middle Eastern nation?
Years of Crippling Sanctions
The framework nuclear agreement that was announced earlier this month by Iran and the so-called P5+1 calls for a substantial rollback in the country’s nuclear program in return for a lifting of sanctions.
Analysts predict Iran may agree to a deal with the West over the nation’s nuclear ambitions in order to get the economy back on track. All parties could come to a deal in the next few days.
The Organization of Petroleum Exporting Countries has pretty much confirmed that it has no immediate plans of cutting its output target for crude oil. This is partly because they have to challenge the oil shale producers in America who are shaking up the industry.
According to a statement released by Iran’s oil minister, Bijan Namdar Zanganeh, the country is apparently strong enough to weather an even deeper slump in oil prices even if the country has to sell its oil at $25 a barrel.
