Iran’s accord with world powers to limit its nuclear program in exchange for as much as $7 billion in relief from sanctions. With this agreement, Iran lower is its nuclear activities but wins an easing of certain sanctions on oil, auto parts, gold and precious metals for six months. Though the deal is reversible but allow Iran to keep exporting crude at current levels.
This is the first major reversal of deterioration of relations between Iran and the West. With Hassan Rouhani’s coming to power who has a peaceable approach to enhance the relations with the West, hopes emerged to put off to concerns that the oil-rich region was heading for a nuclear arms race.
Israeli Prime Minister Benjamin Netanyahu calls the agreement as a historic mistake but this historic mistake is wide of the alienate the United States, that is the on the other side of the table, from its allies and risking unraveling the coalition.
Following the news, Brent crude slid 2.2 percent to $108.60 a barrel, falling from a six-week high, while West Texas Intermediate crude slipped 0.9 percent. Gold fell as much as 0.5 percent before trading little changed at $1,243.51 an ounce. Futures on the Standard & Poor’s 500 Index gained 0.4 percent and the MSCI Asia Pacific Index climbed 0.5 percent, according to Bloomberg.
If we look from the viewpoint of Turkey, in the near future, expanding trade flows between Iran and Turkey will be on behalf of both countries of course. Easing of gold trade sanctions on Iran will support Turkey’s gold export to Iran, by this one can assert that the deterioration in Turkey’s current account deficit may come to an end. Decreasing oil prices may have the same effect.
But on the political side, this winds may change in the long-run. Turkey and Iran are supporting opposite powers in Syria. While Turkey is an absolute opponent of Assad regime, Iran wishes to keep the regime to survive out of the civil-war. With the easing sanctions, Iran may come into play stronger that it has done for years. There will be harsh political challenges whereby both Iran and Turkey has to face each other.