The Russia-Ukraine conflict has driven up global energy prices.
However, it has opened an opportunity for Iran to increase its fossil fuel production and exports after four decades of sanctions, giving Iran a pivotal role in supplying energy to European countries, Mohammad Mehdi Mazrouie, an economic expert, said in an article for the Persian daily Shargh. A translation of the text follows:
The likely revival of the Joint Comprehensive Plan of Action [the 2015 nuclear deal] will set the stage for the growth of Iran’s economy in general and its petrochemical industry in particular. It will be welcome news for the stock market as well, fulfilling a part of President Ebrahim Raisi’s election promises regarding the capital market.
Russia’s invasion of Ukraine has boosted commodity, oil and gas prices, creating favorable conditions for Iran’s petrochemical industry. In addition, Western sanctions against Russia have increased the prices of energy carriers.
As a result, Russia has reduced the production and sales of oil and gas as leverage against the United States and European countries. This is a golden opportunity for Iran to make its way to Europe’s oil and gas market.
However, it seems that Iran is missing out on this lifetime opportunity, due to the government’s negligence. Russia, which has used Iran as leverage to pressure the West for the past 40 years, is once again emerging victorious.
Russia’s invasion of Ukraine has boosted commodity, oil and gas prices, creating favorable conditions for Iran’s petrochemical industry
With the revival of JCPOA, Iran will be able to sell 100 million barrels of oil it has stored on ships, ports and other places freely and without intermediaries and at a reasonable price, and consequently revive its flailing economy. The local currency will appreciate, small and large businesses will thrive and once again regional countries will realize that Iran is a force to be reckoned with.
The prices of energy carriers and petrochemicals will increase, once the JCPOA is finalized. As 60% of the country’s petrochemicals are export-oriented, the rise in their prices will help capital market. The Russia-Ukraine war could be considered a golden opportunity for Iran, economically speaking.
Europe has faced challenges ever since the start of the war. You can expect it to show some flexibility in the nuclear talks to procure gas from Iran instead of Russia. So the only country that can control the current crisis in the short term is Iran.
It’s the best time for Iran to play its trump card. In fact, the West can supply more oil to the market by reviving the nuclear deal and dent Russia’s stranglehold on Europe.
On the other hand, revenues from the exports of Russian products from the International North-South Transportation Corridor can bring significant revenues for Iran. Russia needs essential goods for domestic consumption, which is a good economic and trade opportunity for Iran. It has to supply a large part of essential goods through Iran because of Turkey’s stance, as a member of NATO.
All in all, the Iranian government should seize this golden opportunity to pull out the country from the current economic crisis that has disrupted the lives of a majority of its people; we are witnessing a staggering increase in the prices of basic goods every day.
The government needs to prioritize national interests over that of its ostensible allies. This is an opportunity to forge ties with the world.
