Last Friday, Qassem Soleimani, head of the Iranian Revolutionary Guards’ QUDS force, was killed by an American airstrike outside Baghdad airport. The Ayatollah was not pleased and Tehran has promised to retaliate. At the time of recording, the world is still waiting to see how Iran might respond. Some of have speculated that they could disrupt the world’s oil markets by closing the Strait of Hormuz, which acts as a vital artery for around a third of the world’s liquefied natural gas and almost a quarter of the world’s oil. Today, oil prices surpassed $70 and if tension escalates the price is bound to grow. How dependent is the global economy on affordable Middle Eastern fossil fuel? This week, Nicholas Barrett is joined by Maria Demertzis and Niclas Poitiers to discuss how the US-Iran hostilities are affecting global economy.
A US president taking a unilateral decision that affects European interests; European policymakers outraged at US interference in their affairs; European businesses fearing losing access to some international markets – sound familiar? This is the story of a crisis that took place in 1982 regarding the Siberian gas pipeline project; its outcome should inspire optimism in the Europeans’ capacity to counteract Donald Trump’s decision to withdraw the US from the Iranian nuclear deal.
We are pleased to welcome Dr. Masoumeh Ebtekar, Vice President and head of Department of the Environment of Iran to Bruegel on 13 December to have an off-the record discussion about the opportunities and challenges that Iran is about to face in environment and economics.
With some sanctions temporarily lifted, now is the chance for Iran to reintegrate into the global economy and political system. But comprehensive economic and political reforms are needed.
The lifting of international sanctions will have a big impact on the economic relationship between Iran and the rest of the world.
Iran’s energy sector is vital for the country’s economy. Now that sanctions have been lifted, the government must reform the oil sector to encourage investment from international oil companies.
The Iranian nuclear deal reached in July can potentially reshape the Iranian economy in general and its energy sector in particular. On the basis of this historical step, many voices suggested that Iran might (or should) become a new gas supplier to Europe. We suggest that there are important impediments to significant commercial gas flows from Iran to the EU in the foreseeable future. We argue, however, that cooperation on a limited pilot project could have strategic value.
European leaders seem to have been caught somewhat off-guard by the Iran deal. The Greek saga alone could explain this. The problem is that other competitors —Russia and China— are one step ahead.