Iran Enters a New Era as Nuclear Sanctions are Lifted
The United States and EU have lifted economic sanctions on Iran following confirmation from the United Nations that the country is following through on its obligations set out in last year’s nuclear accord.
Implementation Day arrived earlier than many expected, probably because the Iranian government wanted to rush sanction relief ahead of February elections, which won’t just determine the next parliament but also the Assembly of Experts – the clerical body that might be called on to pick Iran’s Supreme Leader should Ayatollah Khamenei die or step down in the next eight years.
One immediate impact of sanction relief is an increase in global oil supply. Iran used to be OPEC’s second-largest producer, and although its energy infrastructure is aging and investment-starved after years of sanctions, the country expects to sell an additional 500,000 barrels a day right out of the gates. The lifting of sanctions caused an immediate plunge in the stock markets of oil-producing Gulf states, with Saudi Arabia seeing a drop of 5.4% and Qatar 7% in Sunday trading.
While EU companies will now be free to trade and invest in Iran, many US sanctions will remain in place beyond the full implementation of the deal. These pertain to Iran’s status as a state sponsor of terrorism and its human rights record. New sanctions are also a possibility following Iran’s recent ballistic missile tests. As a result, in the global rush to get a foothold in Iran’s untapped market of some 80 million people, US companies will be at a distinct legal disadvantage vis-à-vis their European and Asian competitors.
The nuclear deal and the future tone of US-Iran relations will feature prominently in the upcoming US presidential race, evident in Hilary Clinton’s declaration that she supports new sanctions against Iran mere hours after the deal was officially implemented.
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