The United Nations Security Council and western sanctions on Iran are set to be lifted in a few days.
Not only Asian, European and Russian firms are lining up, but also American giant corporations, including Apple, General Electric, Boeing and Schlumberger, are waiting behind the door to reap significant economic and financial benefits from the nuclear deal.
If smaller firms know the process, where to start, how to connect and communicate, they can potentially have a better shot at reaping the benefits of the Iranian economy, wrote President of the International American Council Majid Rafizadeh for Huffington Post.
Business With Iran
Iran possesses the world’s largest untapped emerging market in the world, worth over $1 trillion. There exist opportunities in almost every sector and the economy desperately needs new capital.
After Implementation Day, foreign businesses will be permitted to operate in the country.
Iran will reenter the international community, rejoin the international banking and financial system, as well as the open market for oil, affecting global markets. Tehran plans to increase its oil sales to 1 million barrels per day and the 2016 budget is based on $35-$40 per barrel.
More fundamentally, under the terms of the nuclear deal, the United States will lift its laws punishing third parties for doing business with Iran. Sanctions on dozens other industries besides oil and gas-such as metal and gold-will be lifted.
European investors and businesses have a close eye on Iran in 2016, attempting to profit from Iran, with the second-largest population in the Middle East, sizable, educated and savvy middle class, as well as the world’s second- and fourth-largest gas and oil reserves respectively.
In order not to fall behind European companies, US firms will either push the State Department to grant them licenses to operate in Iran, or they will utilize subsidiaries to trade indirectly.
Hewlett-Packard Sarl, HP Inc.’s Swiss subsidiary, was attempting to work out a deal to sell its products in Iran, the Wall Street Journal reported last month. Apple has also mulled opening stores there.
Reentry for Royal Dutch Shell and Total, which are based in Europe, is likely to be easier. Oilfield services provider Schlumberger, based in Houston, is also well-positioned, given its prior work with Iran.
General Electric had already distributed some medical equipment in Iran under the sanctions’ regime and could capitalize on its exposure there to get business for its other units.
Last year, Boeing was given a temporary license to sell spare aircraft parts to Iran, potentially laying the groundwork for future commercial aircraft deals. Iran Air has said it needs at least 100 passenger jets.
As the country comes out of economic sanctions, Tehran will attempt to attract foreign businesses and investors in full force.
American Firms
Iranian-American diplomacy will continue and likely increase. However, this will be anchored in tactical and economic cooperation due to their convergence of interests in Iraq and Syria.
Washington will lift sanctions on the Implementation Day of Iran’s nuclear deal with the six world powers, which is expected to be either on Saturday or Sunday, according to Iran’s deputy foreign minister, Abbas Araqchi.
Secretary of State John Kerry said this week: “As we get closer to Implementation Day, the next major milestone in the JCPOA, I am pleased to report that we have seen important indications of significant progress towards Iran completing its key nuclear commitments under the deal.”
While there is some truth to the idea that US companies will be the largest losers of the nuclear deal while European firms rush to benefit, the State Department will likely begin granting more licenses to US corporations to operate in Iran.
Some American corporations, such as Boeing, and some academic institutions will likely get permission to conduct business or interact with Tehran. More than 190 waivers have already been granted.
Shares of Apple closed down 2.6% in the stock market on Wednesday. Boeing lost 2.9%, GE fell 1.4% and Schlumberger dipped 1.2%.
