A new dawn or an historic mistake, whatever your viewpoint on the deal between Iran and the major powers, it has brought to an end to an era of complex discussions on the Islamic Republic’s nuclear programme.
The removal of those punitive measures will not only benefit Tehran as it seeks to increase oil production, but could also bring significant economic benefit to neighbouring countries.
Re-energising Iran’s economy
Economic and financial sanctions imposed by the EU and the US will be lifted when the agreement goes into effect at the beginning of 2016.
Restrictions on Iran’s economy will be removed from different sectors. Funds frozen in international banks are estimated to be around $100 billion. Directly after the deal, Iran signalled its aim to increase oil output by the end of this year.
On the wider perspective, analysts believe that lifting sanctions could bring significant trade benefits countries to like Turkey and the Gulf states, particularly the UAE, as Iran is its fourth largest trading partner.
Banks and trade would be the first Iranian sectors to benefit from the agreement as Dubai has the necessary financial and trade infrastructure. Within a year the volume of business between the Emirates and Iran could increase by 20%.
The Abu Dhabi perspective
For further insight on the issue Daleen Hassan interviewed Nour Eldeen Al Hammoury, chief market strategist at ADS Securities in Abu Dhabi.
Daleen Hassan: “Forecasts have indicated that Iran will increase its production by the end of the year. How could OPEC adjust to this situation and what would the trends for oil be until then?”
Nour Eldeen Al Hammoury:
There are many reports and commentators have noted that it will be hard for Iran to export one million barrels a day right after lifting the sanctions. The question everybody wants answered now is is how OPEC will manage such risk. Well, we believe that they will succeed in stabilizing prices year, as they already did at the start of the year. The key support for West Texas crude stands around the level of 49.88 dollar, which remains a solid support so far”.
Daleen Hassan: “Neighbouring countries could have an opportunity to revive trade with Iran. From your perspective in Abu Dhabi, how could the UAE benefit ?
Nour Eldeen Al Hammoury: “Of course, lifting the sanctions on Iran opens the door for opportunities all over the world, not only for middle east countries. But it’s worth mentioning that the geographical proximity is one of the positive factors for UAE. Moreover, the deal between Iran and the West may ease fears of geopolitical tension in the region. Therefore, trade, business and financial opportunities are likely to be significant between Iran and the region.”
Greece crisis shift
In the other major international negotiation of the moment
Greece and the other members of the eurozone have started to work on a third financial rescue programme amounting to 86 billion euros over three years.
Greek Prime Minister Alexis Tsipras viewed it as a bad deal that would make life more difficult for his country, but had to accept it because the alternative would have been worse.
Christine Lagarde, IMF Managing Director, believes that without serious debt reduction or restriction in place, the programme will not be viable.
Addressing these issues of viability, ECB President Mario Draghi said that measures, such as a 30-year grace period, would need to be considered by eurozone member states as part of the package.
“The Greek situation is complicated,” Nour Eldeen Al Hammoury told BME. “The plan that was refused by the government was approved by the same government again, despite the fact that the government does not believe in this plan.
“We share the same view of the Greek government – that the plan does not grant enough growth for Greece in order to be able to repay its debt. This is exactly what happened with the first and the second bailout plan.
“Greece is trying as much as possible to avoid collapsing again, I think that the new program will not be effective in its current form. The best solution for Greece is to extend the period of debt repayment or restructure the debt over the long term, before launching the third rescue programme.”Share your thoughts and comments via Euronews’ social media network using the hashtag: #Businessmiddleeast.