(MENAFN- The Journal Of Turkish Weekly) The possible effects of sanctions relief on oil markets and prices have been hotly-debated after Iran and the P5+1 countries (China, France, Germany, Russia, the United Kingdom and the United States, coordinated by the EU) reached a landmark nuclear deal on 17 July 2015. In this case, the removal of restrictions on the oil exports of a country that hosts the world's fourth largest oil reserves is expected to put further down-ward pressure on global oil prices in already over-supplied oil market.
The nuclear deal would basically limit Iranian nuclear activities including its enrichment of uranium and plutonium and allow for International Atomic Energy Agency monitors to verify that Iran's remaining nuclear program is being exclusively used for the development of peaceful nuclear energy. In return for enforcing these limitations, Iran will gradually be unburdened of the sanctions impairing its economy, including the export and investment ban on Iran's hydrocarbon sector, the cutting of Iranian banks' access to SWIFT, and the restrictions on the Iranian banking, insurance, and shipping sectors.
On 20 July 2015, the UN Security Council also adopted a resolution endorsed by the nuclear deal. This resolution signals the beginning of non-sanctioned Iranian economy, which will undoubtedly have an effect on Iranian oil exports because it results in the lifting of oil-related sanctions against the country.
For years Iran's oil exports have been subject to certain restrictions aimed at targeting the country's oil-dependent economy in order to increase pressure on the government to restrict its nuclear activities. As the US and EU imposed sanctions on oil exports from Iran in 2012, other importer countries, such as China, India, Japan, South Korea, Turkey, the UAE, and Syria, also halted or reduced their purchases. According to the US Energy Information Administration, while Iran exported 3.6 million barrels of crude oil per day (bpd) at the end of 2011, the country's export levels declined to 1.3 million bpd in 2013. Yet with increasing oil imports from India and China, Iran's export levels managed to reach 1.4 million bpd in 2014.
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