Iran is pushing full throttle to reestablish business with the rest of the world, as western companies move cautiously to renew ties abandoned during international economic sanctions that largely ended a week ago.
Thorny legal hurdles still stand in the way of Iran’s full engagement with western companies such as Daimler AG, British Airways and SAP SE. But Iranian officials and businessmen are driving to surmount them while many western executives—mostly European for now—are testing the waters in the country, wrote the Wall Street Journal.
Iranian officials here say they are prepping their first shipment of crude to Europe as early as next month. And Iran’s largest oil tanker company, National Iranian Tanker Company, is considering an international listing of its shares, said an executive of the state-controlled firm, the world’s largest tanker firm by capacity.
In the corridors of Iran’s Oil Ministry, companies looked for opportunities to do business: A European oil delegation was pacing the lobby ahead of a meeting to purchase Iranian oil while a few floors up, two Chinese traders exited a separate meeting.
At a recent oil conference, a Canadian executive said he was escaping the oil-industry slump in his own country. “It’s dead in Canada,” he said.
Iranian government officials are trying to lure back western companies as well. Iran is revamping its contract terms for oil companies working in Iranian oilfields to make them more profitable and longer lasting. The contracts are expected to be presented in London next month.
German auto and truck maker Daimler this week said its commercial truck division would resume business in Iran right away, having signed letters of intent with joint venture partners.
Daimler, which makes Mercedes-Benz cars, entered Iran in 1953 and sold up to 10,000 vehicles a year there until 2010.
“With its growth potential following many years of sanctions and the pent-up demand in the transport sector, Iran offers promising opportunities,” the company said.
The division will open an office in Tehran in the current quarter. Daimler and its partners plan to cooperate in local production and sales of Mercedes-Benz trucks and powertrain components.
Business software maker SAP said on Friday it is ready to return. Chief Financial Officer Luka Mucic said SAP would help companies build up their software infrastructure, in sectors ranging from oil and gas to manufacturing.
British Airways, meanwhile, is actively exploring a Tehran service, Willie Walsh, chief executive of the carrier’s parent International Consolidated Airlines Group SA, said this week.
Other airlines, including discount carrier Norwegian Air Shuttle, are considering similar moves. Air France-KLM last year disclosed plans to resume flights.
Plane deals also are on the runway. On the eve of the lifting of sanctions last weekend, Iran said it had a deal with Airbus Group SE to acquire 114 planes once trade restrictions were removed. Airbus has not confirmed that order, but said it could enter into business with Iranian airlines in compliance with all international laws once sanctions are eased.
In the US, General Electric Company is moving tentatively now that international restrictions are loosening.
“We have begun looking at ways to do business in Iran while fully complying with the rules laid out by the US government,” a GE spokesman said on Friday.
The industrial conglomerate has maintained a small foothold in the country, selling medical equipment under “humanitarian” exceptions, and held US approval to sell spare parts for GE-built jet engines, although a parts sale was not finalized, the company said.
For Iran, a priority is restarting oil exports that were cut off when tightened sanctions all but shut them down. Iran is preparing to restart crude shipments to the European Union as early as next month, according to Iranian officials.
It is uncertain how quickly Iran’s petroleum industry could achieve a projected increase of up to 500,000 barrels a day. But early plans by Iranian officials are already underway.
Iran’s state-owned National Iranian Oil Company is tentatively preparing a first shipment of at least 1 million barrels of light crude to a European port in the Mediterranean as early as mid-February, Iranian officials said.
It would be the first significant shipment to the European Union since 2012, when tightening western sanctions all but made European imports of Iranian crude impossible. That ban was lifted last week after international powers confirmed Iran had lived up to its commitments to limit its nuclear program.
“Most of that oil will go to Europe,” one Iranian government official said, reflecting the country’s desire to claw back customers in a market it dominated before sanctions. The rest will chiefly go in Asia, the official said.
European governments are also getting into the act. The Italian government pledged this week up to €8 billion ($8.64 billion) in financing for companies eager to invest in Iran.
Rome hopes to see Italian exports to Iran quadruple over the next two years.
The Bank of Italy is in talks with the Bank of Iran to open the branch of an Iranian bank in Italy to make financial transactions easier. He expects an agreement to come by March.
Trade delegations from France and Germany have also brought in dozens of western executives to meet Iranian counterparts. The governments of Iran and Spain are discussing the possible construction of an Iranian-owned refinery on the Strait of Gibraltar.
Spanish Foreign Minister Jose Manuel Garcia-Margallo said on Monday the planned refinery would be built in the Spanish port city of Algeciras, on a site previously reserved for Russia’s OAO Rosneft—a deal that had to be canceled after the European Union imposed sanctions on Moscow following its 2014 takeover of Crimea from Ukraine.
