French car makers and oil carriers boosted by Iran sanctions deal
Published 26/11/2013 | 23:30
French car makers Peugeot Citroën and Renault and companies that transport Iranian oil are poised to benefit from the six-month accord to rein in Iran's nuclear programme while easing trade sanctions.
The deal struck on Sunday in Geneva among Iran and six world powers, including the US and its European Union partners, will relax restrictions on cars, petrochemicals, aviation parts, gold, and insurance for oil cargoes. In addition, it will let the Persian Gulf state continue exporting oil at current levels instead of forcing further reductions.
Direct commercial benefits from the agreement will be limited because the primary sanctions on oil and banking remain in place. Its significance may be as the first break in a pattern of ever-tighter sanctions on Iran and a potential first step toward its return to the international economy.
"Any indication that we could resume doing business with our partners in Iran goes in the right direction," Peugeot spokesman Jean-Baptiste Thomas said. "We'll of course welcome the re-opening of the Iranian market."
In exchange for a selective easing of sanctions, the agreement requires Iran to curtail sensitive nuclear activities, reduce its stockpile of enriched uranium and agree to increased international inspections of its nuclear facilities.
The accord depends on Iran keeping its end of the bargain and the Obama administration fending off congressional pressure to impose a new round of sanctions. American companies don't stand to profit because almost all US trade with Iran other than food and medicine has been banned for decades.
Sanctions have cost Iran $120bn in lost revenue since the US and EU started imposing tough penalties on energy, ports, insurance, shipping, banking and other transactions in 2010, according to US Treasury estimates. The American sanctions penalise other nations that trade with Iran, including US allies.
Along with the carmakers, the accord may crack open the door to trade with Iran for gold traders in Turkey, oil refiners in India and shipping insurers in London.
Iran, the second-biggest producer in the Organisation of Petroleum Exporting Countries before oil sanctions took effect in July 2012, has fallen to sixth place.
Even the limited paring of sanctions now will produce tangible benefits. Easing the auto sanctions will restore $500m in lost trade to Iran over six months, according to Obama administration officials, who asked not to be named, describing details of the package.