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A senior US administration official has claimed that under the interim nuclear agreement made last year with Iran, Tehran will be able to access about $4.2 billion of the roughly $100 billion in foreign exchange assets it has around the world.
Sanctions have prevented Iran from using the large number of assets that it has trapped in various countries and which are mostly in the form of oil revenues. However the six month accord, signed on the 24th of November, will offer the country’s struggling economy relief to the tune of about $7 billion, of which $4.2 billion is in the form of assets held abroad.
The US official told Reuters that under the terms of the agreement Iran would identify exactly which funds it wants to access and then, depending on the country’s compliance with its part of the deal, the Western authorities would hand over the desired funds in a series of instalments over the following six months.
Related article: Iran, Russia Ruffle US Feathers with Oil Swap Deal
The US are trying to persuade US companies to still remain wary and keep away from Iran, claiming that the sanctions relief is only the first step and is reversible, however European companies are already eyeing up the potential in Iran, awaiting the full removal of sanctions. Years of economic isolation mean that the country will need to update its old infrastructure, find jobs for its very young population, and resume the development of its large oil and natural gas reserves, and investors are excited by the opportunities available.
Belgium chemical firm Tessenderlo has agreed to ship fertilizer out to Iran within weeks after trade for Iranian potash has already started to pick up following the easing of sanctions. Whilst the sanctions never actually targeted fertilizer imports, the lack of access to foreign banking systems prevented Iran from paying for any shipments and severely restricted international trade.
The interim accord signed between Iran and Western powers is meant as a show of faith from both sides and to buy time to settle on a complete deal that will finally end the nuclear dispute.
By. Charles Kennedy of Oilprice.com
Charles is a writer for Oilprice.com