Yesterday’s nuclear deal between Iran, Britain, France, Germany, Russia, China and the US principally means two things: restricting Iran’s nuclear program for the next 15 years and lifting sanctions against the country.
Despite both celebration and outrage at the outcome of the talks, there is no guarantee that both sides of the deal will be met. The sanctions against Iran will only be lifted once the International Atomic Energy Agency has concluded that Iran has cooperated with the terms of the deal. Meanwhile, the U.S Congress has 60 days to try and veto the decision. No sanctions can be waivered in this time, however President Obama has stated that should the Congress object he will use his Presidential Veto to ensure the deal goes ahead.
All things considered, it will probably be the end of the year or early 2016 before there are tangible changes as a result of the agreement. In the meantime, this is what the deal means for everyone, simplified.
If the sanctions are lifted, it will obviously have a positive effect for the Iranian people who like most of us, have their quality of life at the forefront of their minds. In short, they will have access to medications we take for granted (most patented drugs which pharmaceuticals currently replicate in country), cheaper imported and genuine electronics (Apple has already entered into talks with Iranian distributors to bring their products to a starved and expensive market) and access to sites such as Amazon.
Access to technological advances without hiding behind firewalls will also mean that the most educated population in the Middle East can further their modernity and expand an already present thirst to become cosmopolitan. Not to mention a dip in inflation.
FOR THE REGION:
A deal between the US and Iran isn’t going to create world peace anytime soon. Tensions in the Middle East will continue, particularly between Iran and Israel and Saudi Arabia. Fundamentally different in culture and religion, the deal would mean that Saudi would have a direct oil competitor in Iran. Tehran is also currently supporting Yemen against Saudi-led attacks which will continue to cause tension.
Israel is adamant that the deal is a ‘historic mistake’ with the view that Iran’s power within the region will grow, and become a threat to Israel who have forever been in a vulnerable position. Plus, Tehran currently backs the Assad’s government in Syria, against the grain of most of those they’ve just struck a deal with. Again, tensions could rise if Iran uses its newly found economic flexibility to increase support to Assad. Needless to say, the effect on the region is characteristically complex, and will continue to be so.
Iran has been supporting the Iraqi government against the rise of ISIS and militia, and in its support of Assad doing the same in Syria. As a heavily Shia Muslim state, they’ll continue to battle against the rise of Sunni fanaticism.
However, this could possibly result in the opposite of the desired affect. Hassan Hassan, author of the book ISIS: Inside The Army of Terror, told The Wall Street Journal that the nuclear deal could benefit ISIS by making disaffected Sunnis feel even more like the US and Iran are conspiring against them. As it stands, Tehran will become an ally in the region on at least that front but we'll have to wait to see the result of such a move.
FOR OIL PRICES:
Iran has the fourth largest oil reserves. Once sanctions are lifted there will be an inflow of oil into the market. The country has 30 million barrels of crude oil stored at sea and ready for sale, according to FACTS Global Energy. So, that will logically be their first move.
But it’s unlikely to flood the market. It’s more likely that Iran will want to sell their stocks slowly rather than dumping it all into the market. The International Energy Agency estimates that Iran could sell some 180,000 barrels per day for six months, which would knock down oil prices but won’t send the market in a tizz. Especially as things are more up in the air than the proverbial ‘they’ would have you believe and traders have been anticipating a deal for some time, already taking the changes into account.
FOR THE WORLD MARKET (AND IN TURN THE UK):
Ending on a lighter note, everyone go nuts! Aside from oil, we can expect an influx of Iranian pistachios. Banned from the world market since 2013, they’ll be making a comeback. We’ll also have easier access to world-renowned caviar, saffron and spices. But mainly we’re excited about the pistachios.