Baku, Azerbaijan, April 24
By Farhad Daneshvar – Trend:
Mehrdad Emadi, an economic expert and consultant at the UK-based Betamatrix International Consultancy, believes that the possible decision of US President Donald Trump on pulling out form Iran’s 2015 nuclear deal would impose serious damages on the European Union.
“There will be three level effects of Trump’s possible decision. Level one, which I call short-term reactions, will be seen in the oil market, captured by price movements pushing the oil price closer to $80 per barrel. However, this would be the most superficial of the effects, since other oil producing countries such as Iraq, Russia and Saudis would fill in most of the void left by Iran’s reduced exports of crude,” he told Trend commenting on the speculations suggesting that President Trump may leave the nuclear deal on the May 12 deadline, on which he must sign a presidential waiver on sanctions on the Islamic Republic.
“The second level effect, would be a substantial increase in the risk of doing any kind of business with Iran by Western firms; as we are already witnessing agreements with Boeing, Airbus and Total are experiencing a semi-freeze status, indicating uncertainty about the benefits of doing business with Iran,” he added.
“The third level effect, which I view as most negative for the West, especially Europe, but also significantly damaging the economic capability of Iran to become an industrial powerhouse, will be the continuation of integration of the Iranian economy into the sphere of interest and control of the Russia/China axis, where Iranian foreign trade will be based on Ruble and Yuan in almost all of its oil and gas transactions,” Emadi said.
“The biggest loser of this will be the European Union, where the monopoly reach of Russian energy companies becomes substantially tighter and more difficult to resist, while at the same time –at least semi-permanently – will eliminate Iran’s ability to become a key supplier of energy to Europe,” he believes so.
“The real winner from this scenario will be the Russian government, whose position vis-à-vis Europe will become immeasurably more powerful,” Emadi concluded.