The U.S. will lift sanctions on Iran’s oil industry when a preliminary deal is signed in what amounts to a major financial win for the country. Iran’s energy industry — the lifeblood of its economy — has been subject to financial restrictions for many years.
Assuming its deal with the United States holds, Iran will probably be able to charge more for the oil it exports and sell that fuel to many more buyers. It is one area where the country appears likely to end the war on better footing than it started.
The agreement says that the U.S. Treasury will “issue waivers for the export of Iranian crude oil, petroleum products and derivatives, and all associated services, including banking transactions, insurances, transportation, etc.,” according to the text read on Wednesday to reporters by a senior U.S. official on a conference call.
The text also says that the United States will “terminate all types of sanctions” against Iran in a final agreement that the two sides will negotiate over 60 days.
U.S. sanctions have forced Iran to send a vast majority of its oil to China, selling the fuel at a steep discount. Chinese refineries have been among the few businesses willing to take the risks associated with violating American policy. The restrictions forced Iran to ship that oil clandestinely on what are known as shadow tankers, which try to hide their whereabouts and ownership. The sanctions have also made it difficult for Iran to be paid in widely used currencies like the dollar or the euro.
For all the financial freedom Iran stands to win, its energy industry still faces formidable challenges, including rebuilding infrastructure damaged in the war. The U.S. blockade on Iranian exports also forced the country to shut off wells that could prove difficult to restart.
In a report published Wednesday, the International Energy Agency said the country’s oil production would hold relatively steady next year at about 3 percent of the world’s supply.
Producing and selling a lot more will most likely cost billions and require technical expertise that may be hard to access until Iran has reached a final agreement with the United States and established friendlier and stable relations with other Middle Eastern countries.
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