Written by Tharushan Fernando
18 Jan, 2016 | 10:10 pm
Minister of Petroleum Resources Development, Chandima Weerakkody, elaborated on the effects of the recently lifted in sanctions on Iran by the international community.
He went on to state that this comes as a major comfort and concession for Sri Lanka.
Due to the change in suppliers, several problems arose as the refineries in the island were conditioned for Iranian oil. He went on to state that there is hope that loans and concessions, especially with regard to prices, will be reinstated.
He further added that Iran is the biggest supplier of tar in the world and as country seeing construction of expressways and infrastructure development, there is a major advantage in importing from Iran.
The European Union had terminated all its nuclear-related economic sanctions. This includes an embargo on buying Iranian crude oil as well ends restrictions on Iranian trade,shipping and insurance.
The United States also followed suit and was preparing to no longer apply its crippling sanctions on Iran’s economy. However a full annulment of those restrictions would in some cases require approval by the Republican-dominated US Congress and due to this reason President Obama has opted for issuing “waiver orders” for these sanctions.
However, the US has imposed fresh sanctions on Iranian companies and individuals over its ballistic missile test and the new sanction prevents 11 entities and individuals linked to the missile program from using the US banking system
According to the Iranian Foreign Ministry , they would not negotiate with the US on other issues, while sanctions introduced by Washington, which Iran called “propaganda measures,” would be met with a firm response
With the lifting of sanctions Iran will be able to export as much crude oil to the world as it can, or as much as it can find demand for.
Before imposing an oil embargo on Iran in 2012, one in every five barrels of Iranian crude went to European refineries. Iran has been selling just over one million barrels a day for the past few years, mostly to China, India, Japan and South Korea.
Iranian economy is expected to regain its momentum with nearly $100bn of Iranian assets are being unlocked
Iran is expected to increase its daily export of 1.1m barrels of crude oil by 500,000 shortly, and a further 500,000 thereafter
Iran is reportedly poised to buy 114 new passenger planes from the Airbus consortium
Nuclear sanctions were put in place since 2006. The sanctions came as retaliating response by the US, EU and UN following Iran’s nuclear programme.
The EU is lifting restrictions on trade, shipping and insurance in full. The US is suspending, not terminating, its nuclear-related sanctions; crucially, Iran can now reconnect to the global banking system
The UN is lifting sanctions related to defense and nuclear technology sales, as well as an asset freeze on key individuals and companies
Non-nuclear US economic sanctions remain in place, notably the ban on US citizens and companies trading with Iran, and US and EU sanctions on Iranians accused of sponsoring terrorism remain in place
The prospect of Iran doubling its crude oil exports has contributed to the continuing fall in the oil price. Benchmark Brent crude closed below $29 (£20.3) on Friday.
Share prices in Saudi Arabia, the Arab world’s largest stock market, fell more than 6% following the lifting of sanctions.
Iran, which is one of the four largest oil producing nations in the world, is preparing to supply 500,000 barrels of oil per day, to the global market.
Analysts say that while the current excess supply of between 2 to 2.5 million barrels has driven oil prices to record lows, the renewed supply of Iranian oil will cause prices to slide further.
Analysts believe that global prices will hover between 25 and 40 dollars per barrel in the near future.
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