Iran deal will have global impact
Iran's detente with the West and its reintegration into the world economy should yield significant benefits globally
Source: Oxford Analytica, EU External Action Service
Outlook
The deal is a landmark achievement for both global diplomacy and counter-proliferation. It strengthens the case for the use of sanctions and diplomacy over military action in international disputes. The agreement will reduce the risk of direct military conflict in the Gulf, potentially allowing the United States to strengthen its 'pivot' to Asia.
The economic and investment dividends will take time to appear. Sanctions will only begin to be unwound once Iran's compliance with the deal has been confirmed -- thus Iranian oil will take time to return to the market. When it does, increased competition will lower prices, benefiting importers of Middle East oil such as China, Japan and India.
Impacts
- The return of Iranian oil will extend the oil price contango and pressure the long end of the curve.
- European, Chinese and Indian firms are poised to benefit most from new trade and investment opportunities.
- EU, US will refocus diplomatic efforts on crises elsewhere.