The nuclear agreement announced on Tuesday promises to be an economic boon to Iran, allowing the Islamic state to gain broad access into the United States’ and Europe’s financial and trade markets.
It allows Iran to become an economic partner of the United States by forming joint ventures and being permitted to buy American-built airliners, and is expected to have a major impact on global oil markets once sanctions are lifted as a part of the deal.
The pact with the U.S. and its negotiating partners calls for the gradual removal of economic sanctions imposed by the U.N. and the European Union as Iran passes milestones on curbing its nuclear activities and allowing international inspections.
With that done, Iranian banks will be permitted to open branches in Europe, gain “financial support for trade with Iran,” guarantees for financial assistance in the form of loans, entry into Europe’s bond markets and exports of oil and natural gas equipment.
Iran will also be able to import “key naval equipment and technology,” and have its cargo flights land at EU airports.
The deal permits joint ventures between Iran and U.S. companies on information technology — read software and hardware computer architecture — and Iran’s oil and gas industry. It can also buy U.S. technology for its automobile industry. It establishes a business relationship between American banks and the Central Bank of Iran.
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The U.S. even promised to lift trade sanctions preventing the import of such signature Iranian products as caviar, hand-woven rugs and pistachio nuts.
World oil prices fell sharply when word of the deal first leaked, but rose again when it become clear that Iranian oil would not be hitting the market for several months at the soonest.
But traders say the long-term impact of global oil markets, already dealing with falling prices and too much supply, could be profound, provided Iran can now attract the foreign investment and new customers with the nuclear deal signed.
With U.S. energy giants in the lead, foreign companies are already placing bets and lining up partners inside Iran for when the sanctions come down. With a population second only to Egypt in the region and a huge youth market largely cut off from Western products, Iran is seen as a prime consumer marketing opportunity.
The lifting of sanctions and broad economic opening, critics fear, promises to bring in more revenue for the religious mullahs ruling Iran and their forces and proxies active in Yemen, Iraq, Syria and Lebanon.
“Money is more a near-term threat than nukes,” said Robert Maginnis, a retired Army officer. “Iran’s [Revolutionary Guard] will fund Assad, Hezbollah, Shia militia in Iraq, Houthis in Yemen.”
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Said Jim DeMint, president of the Heritage Foundation, “Over time, the sanctions relief will pour tens of billions more into the regime’s treasury, courtesy of surging oil revenues.”
He said the deal delivers a “signing bonus” of up to $50 billion in sanctions relief and the gradual release of $150 billion more frozen in overseas accounts.
“It puts the regime on a glide path to nuclear power status and the economic wherewithal to assure that it gets there,” he said.
The nation’s incoming Joint Chiefs of Staff chairman expects Iran to continue to be a bad actor despite Tuesday’s nuclear agreement and says it will use some of the vast sums of freed-up assets to fund its “malign” activities in the Middle East.
Iran is expected to receive about $50 billion in unfrozen assets once the deal is signed.
Sen. Tom Cotton, Arkansas Republican, asked Marine Corps Gen. Joseph Dunford last week if he believed some of that cash will be diverted to fund operations by terrorist group Hezbollah, “as well as to destabilize governments.”
“I think it’s reasonable to assume,” Gen. Dunford answered at his hearing to be confirmed as the next Joint Chiefs chairman.
• David R. Sands contributed to this report.
• Rowan Scarborough can be reached at rscarborough@washingtontimes.com.
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