The west lifts sanctions against Iran: Now what?

THE International Atomic Energy Agency released a report Jan. 16 confirming that Iran has honored its commitments to the nuclear deal it reached with international powers in July. With the announcement comes the prospect of Iran’s return to the international community and, more important for its government, the end of most EU sanctions and several important U.S. sanctions. With the legal frameworks were already in place, the European Union and United States announced the formal repeal of their respective sanctions shortly after the release of the report.

Iran’s oil sector will be the first beneficiary of the agreement, which will remove most of the sanctions that cap export volumes. The European Union is removing its embargo on Iranian crude oil imports, and the United States is suspending its so-called secondary sanctions on foreign firms doing business in Iran. This means that Washington will no longer sanction a foreign company that imports Iran’s oil or invests in its oil sector. However, the U.S. embargo remains largely intact, so while other Iranian industries will also see the benefits of the agreement, those benefits will mostly derive from trade with — and investment from — Europe.