Iran’s new approach to building energy allies is being revealed as the former powerhouse staggers back onto the global stage. The lifting of sanctions in January has given the country a new lease of life. Tehran’s ability to adapt will prove vital, as today’s market is more competitive than the one it reluctantly stepped back from more than a decade ago.
Tehran remains confident that it can continue to build on its current 3.7m barrels a day (b/d) of oil production, which already represents a rise of half a million b/d since February. This means the country is already close to its target of 4m b/d and Tehran has said it aims to export 2.2m b/d by the end of the summer. The country’s strategy to regain superiority has started well, although some of this spike in volume may be a case of Iran emptying its full storage capacity. Read more
US penalties handed down on ZTE, the Chinese telecoms giant, are a reminder that despite January’s partial lifting of sanctions on Iran after UN nuclear inspections, they can still bite.
Previously, the Bank of Kunlun, set up to handle oil for loans and infrastructure deals between Beijing and Tehran during the embargo, had been cited for violations. Chinese commercial and policy banks nonetheless were gearing up last year for legal business, supported by a flurry of official initiatives.
China’s “One-Belt One-Road” outward investment campaign envisions a tenfold increase in Sino-Iranian economic engagement over the next decade to $500bn; Iran took a tiny 2 per cent founding share in the Asian Infrastructure Investment Bank; and the countries discussed bilateral currency swap lines. Read more
By Alireza Jafarzadeh, National Council of Resistance of Iran
August 14th marks exactly 13 years since the day I walked into a conference room at the Willard Intercontinental Hotel in Washington, DC to reveal the existence of Natanz and Arak nuclear sites in Iran for the first time. The revelation triggered an international response that has continued to this day.
The international community owes a huge debt of gratitude to the main Iran opposition movement, the Mujahedin-e Khalq (MEK), for its diligent and continuing efforts to unmask Tehran’s clandestine nuclear weapons program. Without it, the mullahs would have had the bomb by now. Read more
By Christopher de Bellaigue, Trusted Sources
The prospects for an Iranian economic revival and new opportunities for foreign investors hinge on a final agreement at the end of this month on the nuclear deal and United Nations verification – probably at the start of 2016 – of Iranian compliance, after which sanctions will begin to be lifted.
But even before being finalised, the nuclear deal is already proving economically beneficial since the prospect of the deal is facilitating the Iranian government’s efforts at fiscal adjustment essential for longer-term macroeconomic stability.
Political risk is well contained and will be further reduced by the most tangible dividends of the lifting of sanctions: Iran’s gaining access to $100-120bn in frozen assets (as soon as sanctions are lifted) and its readmission to the SWIFT mechanism of electronic money transfers. Read more
The least acknowledged economic race is gearing up for the starting line. Politics aside, the potential Iranian nuclear deal with the five permanent members of the United Nations Security Council plus Germany (P5+1) has led to multinational businesses focusing on the opportunities presented by a reconciliation with the Islamic Republic.
The magnetism of Iran as a destination for foreign investment is rooted in its large well educated workforce, richness in natural resources as well as, of course, its geopolitical importance.
In spite of sanctions, Iran has an established banking sector; infrastructural foundations in the transport, aviation and energy industries; a sophisticated consumer market that is conscious of international brands and products; a large number of port facilities and more than 20 free trade and special economic zones that are well placed to serve international companies. Read more
Tedpix index, 2 years. Source: Tehran Stock Exchange
Iranian investors’ concerns over the future of nuclear negotiations with the world powers, added to falling oil prices, have caused further falls in shares prices on the Tehran Stock Exchange.
The bourse’s main index, the Tedpix, closed at 66,902 on Wednesday – the last working day this week – about 11 per cent down from its 75,949 points on November 24, when investors expected the nuclear negotiators to yield results, particularly an easing of international sanctions over Tehran’s nuclear programme. Read more
By Faisal Ghori, author
The best performing stock market in the world in 2013 was up 130 per cent last year*. The country it serves has a population of nearly 80m, some 40 per cent of whom are under the age of 24. It has one of the world’s highest literacy rates and is also home to the world’s fourth largest proven crude oil reserves. Which market is this? The Tehran Stock Exchange (TSE), of course.
For frontier market investors, Iran remains the Holy Grail. Charles Robertson, Global Chief Economist at Renaissance Capital, believes that following the opening of the Saudi Arabian market, “Iran is the world’s last major market to open up” and could potentially be accessible in the next 6-18 months. Read more
Many Iranians have expressed disappointment that their national currency, the rial, did not strengthen over the weekend in response to the historic phone call between Iran’s president Hassan Rouhani and Barack Obama.
The reason the currency market did not reflect the public mood, analysts believe, is because the central bank is determined to curb a currency crisis and shield the market against political news in order to encourage investment, domestic production and non-oil exports. Read more
Iranian shoppers are getting used to constantly rising prices, especially – and most worryingly – prices of basic commodities. Inflation over the past year has added to feelings of insecurity. Butter, for example, is increasingly scarce in Tehran and, where available, its price has doubled in the past few weeks, from 11,000 rials ($0.44) for 100 grammes to 22,000 rials. Read more
One of the strangest recent developments in Turkey has been gold sales to Iran, which have soared, so helping improve the country’s trade and balance of payments figures.
Thanks to this phenomenon, Turkey, traditionally a net importer of the metal, has racked up net gold exports of $5.5bn off the back of total gold exports of some $13bn so far this year, as Gunay Elif Girgin at Oyak Securities in Istanbul pointed out to beyondbrics. Read more
By Humay Guliyeva and Pan Kwan Yuk
That is the question beyondbrics found itself asking after it had a look at Turkey’s latest trade figures.
According to data released by the Turkish Statistical Institute (TurkStat), Turkey’s trade with Iran in May rose a whopping 513.2 per cent to hit $1.7bn. Of this, gold exports to its eastern neighbour accounted for the bulk of the increase. Nearly $1.4bn worth of gold was exported to Iran, accounting for 84 per cent of Turkey’s trade with the country.
So what’s going on? Read more