Baku, Azerbaijan, Jan. 17
By Dalga Khatinoglu – Trend:
A year after implementation of Iran’s nuclear agreement, called the Joint Comprehensive Plan of Action (JCPOA), United Nations marked the one-year anniversary on Jan.16 and asked the sides to stick to the deal and continue based on commitments.
The concerns over violation of deal raised after Donald Trump, a hard critic of JCPOA, won the presidential election in US.
Trump is in favor of reviewing the deal with Iran, and it seems he would face challenge in amending the nuclear agreement amid the strong support of the UN, the EU on the deal.
But, what the nuclear deal brought for Iran during last year?
According to a report prepared by Iranian former Minister of Road and Urban Development Ahmad Khorram for the Expediency Discernment Council, Iran has lost about $460 billion from sanctions between the 2Q12 to the same period in 2014.
Thus, starting from 2Q14 up to Jan. 2016, when the sanctions were lifted off Iran, the possible damage to Iran could have reached over $600 billion in total, during the sanctions era. It is safe to say the damage of sanctions still continue, since resuming normal operations with foreigners takes time.
Iran’s national currency lost its value against the US dollar by about 3.5 times, the inflation rate soared above 36 percent and tens of billions of Iran's USD reserves were blocked abroad for years, while its GDP plunged from above $528 billion in 2011 to about $393.7 billion in 2015.
On the other hand, Iran’s oil production plunged from about 3.7 mb/d in the pre-sanctions level to around 2.8 mb/d. Iran should have increased oil output to about 5 mb/d in 2015, based on national development plan.
Currently, Iran has resumed oil output and export to above pre-sanctions level.
Iran had planned to increase the gas output to above 360 billion cubic meters per year by 2015, of which over 70 bcm/yr should have been exported. However, currently Iran still faces gas deficit in northern regions during winter and it's gas exports stand at about 9 bcm/y. Iran should have increased gas condensate output to about 1 mb/d as well, but it reached hardly to 500,000 b/d in 2015.
During 2015, Iran produced about 220 bcm of commercial gas, about 20 bcm more than in 2014.
During last year, Iran experienced single-digit inflation rate with 5.2 percent GDP growth, according to World Bank’s estimations. The figure for 2017 and next year is estimated to stand at 4.8 percent and 4.5 percent.
Now, Iran is to issue tenders on 49 oil and gas projects to attract $100 billion investment by 2021, of which 80 percent of that is projected to be foreign investment.
Iran also plans to attract $55 billion worth of investment in petrochemical sector, more than $30 billion in power generation sector as well as $58 billion in mid/downstream gas sector. The country hopes to increase the refining capacity from the current 1.8 mb/d to 3.1 mb/d and decreasing the share of fuel oil (mazut) in the final output from the current 40 percent to below 10 percent.
Iran plans to double petrochemical output to about 120 million tons per year by 2021, while its power output would increase by about 33 percent to 100 gigawatts.
The Islamic Republic's second biggest industry, auto sector, also experienced good growth during last year, increasing the auto products by about 38.7 percent between March-December to about 946,533 vehicles.