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(Bloomberg) — A decade of sanctions imposed on Iran’s nuclear program may come to an end by Monday, unlocking billions of dollars in frozen accounts and paving the way for a surge in oil exports from the Islamic Republic.
The International Atomic Energy Agency is expected to report on Friday that Iran has fulfilled its commitments under July’s nuclear accord with world powers, Iran’s Deputy Foreign Minister Abbas Araghchi said in Tehran. That would enable a joint announcement by Sunday implementing the deal and lifting sanctions, he said.
Iran’s foreign ministry on Tuesday sent its director of political and international affairs, Hamid Baeedinejad, to Vienna, where the IAEA is based.
The end to nuclear-related sanctions will mean that the Iranian economy is open for funds to flood in, with Iran set to get immediate access to as much as $50 billion of cash frozen in overseas accounts, according to U.S. Treasury estimates. Crude exports are expected to rise by half-a-million barrels a day within weeks.
While Iran says it will need $100 billion to rebuild its energy industry and another $29 billion for mining and steel, foreign investors are expected to return only gradually as they wait to make sure the nuclear deal holds. Diplomats left escape clauses if the accord is violated. Should the deal fail, sanctions could be reimposed just as Iran’s nuclear work could return to unchecked development.
“Iran has granted the International Atomic Energy Agency unprecedented access to make sure it is doing all the things it said it would do in this deal,” U.K. Prime Minister David Cameron said in Parliament in London on Wednesday. “We should enter into it with a very heavy heart, a very clear eye and a very hard head in making sure this country does everything it said it would.”
Friday would be the earliest date that IAEA inspectors could verify Iran has removed nuclear equipment and material from atomic sites, two diplomats with direct knowledge of the process said earlier on Wednesday. The IAEA press office declined to comment.
The comments about the deal’s implementation came only hours after 10 U.S. sailors were released by Iranian authorities after their boats drifted into Iran’s territorial waters. Even as U.S. President Barack Obama on Tuesday night praised the nuclear deal for averting a war with Iran, the Persian Gulf incident underscores lingering tensions in the relationship.
“The Americans cannot have trade relations with us, and so be it,” Araghchi said, adding that Iran understands that non- nuclear sanctions targeting terrorism and ballistic missile programs will remain in place. “Iran and U.S. relations will stay where they are — the intention of this deal hasn’t been about trust-building.”
It was precisely because of that lack of trust between Iran and six world powers — China, France, Germany, Russia, the U.K. and U.S. — that negotiations to reach a deal took more than two years. In the end, Iran agreed to eliminate virtually all of its enriched uranium and dramatically reduce its nuclear capacity. In exchange, it will receive sweeping sanctions relief that reconnects its banks to the international financial system and allows oil and gas producers to boost exports.
–With assistance from Thomas Penny.
©2016 Bloomberg News
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