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Main commercial options for Iran after US withdrawal from nuke deal

Oil&Gas Materials 22 May 2018 11:38 (UTC +04:00)

Baku, Azerbaijan, May 22

By Leman Zeynalova – Trend:

Looking at commercials, the main option for Iran to counter possible sanctions by the US and the withdrawal of European companies, will be a full focus on Asia, Cyril Widdershoven, a Middle East geopolitical specialist and energy analyst, a partner at Dutch risk consultancy VEROCY and SVP MEA-Risk, told Trend.

He believes that Iran needs to keep some support from the European Union.

“If they want to have a real position in the world, a rapprochment with the US will be needed, maybe via support of Russia and China, including EU,” the expert added.

Widdershoven noted that looking at commercials, the main option to counter possible sanctions by the US and the withdrawal of European companies, will be a full focus on Asia (China, India) and an expansion to Central Asian, Caucasus and Turkey.

“No other real options will however be available if all sanctions are put in place. Financial constraints and lack of access to technology will be biting in the future capabilities of Iran,” he said.

The expert noted that gas exports also will be hit, as this is mostly in cooperation with companies working with or in US or Western countries.

As for oil prices, Widdershoven believes that they will stay high.

“Don’t expect OPEC or Russia to fill in any gaps due to lower Iranian oil and gas exports. They will try to balance the market around $75-$85 per barrel. There is no need for an end to the OPEC-Russia agreement at present too. Possibility of higher price settings is even larger than a price decline, looking at instability in the region,” said the expert.

“At present gas exports to Asia, Central Asia or Turkey are the only real option. EU gas imports from Iran will be hit by sanctions for sure. Future is bleak, time to react or change total approach Iran is necessary, as there is no other option.”

US President Trump warned on May 8 that the country will walk away from the nuclear accord of 2015, reached between Tehran and the six world powers. Trump also announced that Washington re-imposes the "highest level of economic sanctions" on the Islamic Republic.

The move has been strongly criticized by other P5+1 members, Moscow, London, Beijing, Paris, Berlin and Brussels, who have confirmed their commitment to the deal.

The agreement was signed on July 14, 2015, and ensured that Iran's nuclear program remains peaceful in exchange for sanctions relief.

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Follow the author on Twitter: @Lyaman_Zeyn

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