Post Sanction in Iran and its effects on Oil, gas, Petrochemical and Shipping Industries:

Post Sanction in Iran and its effects on Oil, gas, Petrochemical and Shipping Industries:

Economical sanctions on Iran have caused some restrictions for several years especially on those companies who were active in Iran in oil and gas industry.

A major country in terms of natural sources of Oil and Gas have a lot to say in the international market, 2nd reservoirs of gas in the world and 4th of Oil and in total, biggest reservoirs of natural source in the world make Iran as one of the most significant countries in whole around the world.

Geopolitical position, natural sources, diversifications of country’s income, well young educated population and strong local industries will give another reason to be target market of many companies in the world, especially in EU to look at Iran as next booming market in all sectors.

Since 2011 when the economical sanctions over Iran have increased, many companies had to leave this rich market specially with having swift under sanction that made it almost impossible for EU and Japanese companies to keep their trades with Iran. Increasing the pressure from west had made all Iranian foreign business partners to consider alternative business or even leave their investments in Iran and kept their business in other regions.

Having moderate  and educated government in Iran has put Iran in the right place to negotiate with top most powerful  countries in the world and brought them up to the negotiation table and the outcome was an agreement after 2 years of daily negotiations. An agreement which was positive and beneficial for all economical companies which have nothing to do with politics, all they want is to have peaceful business relationship and help their countries to develop their industries.

Agreement was made, sanctions removed, Iranian market has started to join the international community, oil and gas majors were look at Iran as their 1st priority to start to invest, trade and consider Iran as potential target market. Same scenario happened to the petrochemical and shipping market which each sector was facing with huge demand and interest from foreign companies who were away for 5 years .

Same country, same people, same history, same roots have changed all over to become most stable and safest country in the region and main target for most of the western economical entities.

Oil and gas:

Iran has always been playing a significant role in the OPEC and with lifting the sanctions, Iran is trying to increase their production and take back its own position in the international markets. Even though a lot of people in market believe that increasing Iranian oil products and pumping more oil in the market will cause to drop the price of oil more and more but Iranian Oil Minister has clearly advised that all Iran is asking would be its own previous position in the Market.

Same scenario on Gas specially on Joint field of South Pars of Persian Gulf which is between Iran and Qatar in which Iranian government is trying so hard to bring more financers and investor to be able to extract more gas out of this joint field and supply their local consumptions as well as export with more gas.

Petrochemical and liquid gas products:

Iran is one of the major exporters of the petrochemical and liquid gas products with 60 million ton capacity which only 78% of that could be used which is around 44.5 million tons in 2015. This would attract a lot of companies in west and east to look at Iranian market in different sectors including, construction, trade, finance, shipping, licensing etc.

Now having EU market back, Iran is in the position to export products to EU as well even though China might still have better net back for Iranian exporter in terms of final price and better margin but Iran traditionally has always been involved in EU trade and had its own market share therefore, this is not having  more margin of the market  but Iran needs its own previous position in the market.

Many EU traders and end users are visiting Iran these days and look for different source of Petrochemical and Gas products in Iran to be able to start their trade with them.

Shipping Industry:

Norwegian, German, Dutch, Danish, Swedish, Italian, British, Japanese and Greek ship owners have historically been in Iran’s market both in wet and dry sectors, as the international economical sanctions started on in 2011 and blocked the financial transaction by sanctioning the swift and banks, and then giving up of the Protection and Indemnity clubs made all mentioned ship owners not being able to call Iran during few years. Now with having sanctions lifted, ship insurances including Haul and machinery plus P and I clubs are considering to start giving coverage to all ships calling Iranians ports. Of course while this will help Iran to have more supply of the tonnage in Persian Gulf, it may cause to decrease the freight rates as market will be faced with more supply of tonnage for time being.

With increasing the production of crude oil, oil products and petrochemicals, there will be more demand of tonnages in Persian Gulf which Iran can enjoy trading with new built European sea worthy vessels.

Post sanction of Iran has also made the two biggest Iranian ship owners including NITC and IRISl to look for more new built ships and increase their fleet to be able to trade their vessels worldwide like before the sanctions.

Iran, Investment and Future …

Many people in the market believe that Iran is the safest country in the Middle East while we can see some disputes between different groups in the most of countries in the region; this will create confidence for all of the foreign companies to attract more investors for different sector.

Low labor costs, wide source of natural sources, many free zones areas including in land and off shore in Persian Gulf and Caspian Sea, young educated people, huge economical potentials, and wide range of facilities from government will help every traders in the market look at market as booming market and consider shifting some businesses towards Iran.


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