Nuclear Talks, Glutted Markets Offer Iranian Economy Little Relief

The deadline for an agreement for Iran to wind down its alleged nuclear weapons programs has been extended for seven months. Continued sanctions for Iran combined with low oil prices mean economic pain for Iranians and could threaten moderates who support an agreement and better ties with the West: “Unwinding limitations on Iranian oil exports will take time; it will take even longer to juice oil production enough to support substantially more exports; and depressed oil prices mean each barrel of crude is worth about one-third less than just a few months ago,” writes Keith Johnson for Foreign Policy magazine. Johnson points out that lifting of sanctions hinges on compliance with terms of any agreement; oil-industry equipment suppliers, financers and insurers will be wary about quick return to the market. The Iranian government is eager to hike production and collect oil revenues. Despite unrest in countries like Iraq, Nigeria and Libya, oil flows. Low oil prices impose more pain than sanctions do. – YaleGlobal