All in Economy

Could Trump Deliver Iran an Oil Windfall?

Could Trump Deliver Iran an Oil Windfall?

Richard Nephew
Economy

◢ The president’s recent statement that OPEC may have something to do with the president’s own decision to create a crisis with Iran. While attention is duly paid to how much Americans have to pay at the pump, a more subtle and complicated story will soon play out with respect to Iran and the reapplication of US sanctions ordered by Trump on May 8, 2018. In fact, unless oil prices are contained, the primary result of the president’s action may be to ensure that Iran profits from the oil market risks that sanctions have created.

Europeans Beat Back Americans as FATF Gives Iran More Time on Financial Reforms

Europeans Beat Back Americans as FATF Gives Iran More Time on Financial Reforms

Esfandyar Batmanghelidj
Economy

◢ At its plenary meeting in Paris, the Financial Action Task Force (FATF) opted “to continue the suspension of countermeasures” related to Iran’s inclusion in the so-called “blacklist” of countries with deficiencies in anti-money laundering (AML) and combating financing of terrorism (CFT) standards.  The suspension will be in place until October 2018. The suspension can be seen as a victory for European and Iranian multilateral cooperation in the face of the increasingly hostile American posture. 

As Trump Goes Nuclear On Iranian Oil, Europe Must Match His Brinkmanship

As Trump Goes Nuclear On Iranian Oil, Europe Must Match His Brinkmanship

Esfandyar Batmanghelidj
Economy

◢ As the US chooses the "nuclear option" on Iran's oil, Europe must find leverage and force the US to walk back on its announced policy of driving down Iranian oil exports to zero. The negative consequences for European economy could prove significant, and the risks of regional escalation are high. There are three measures that the EU can pursue to pressure Trump and prevent a dangerous escalation.

Closure of Tehran Bazaar Reflects Fierce Elite Competition, Not Popular Politics

Closure of Tehran Bazaar Reflects Fierce Elite Competition, Not Popular Politics

Esfandyar Batmanghelidj
Economy

◢ The bazaar of today is not the bazaar of forty years ago, and no longer plays the same role as a key actor in Iran’s popular political mobilizations. The recent bazaar closures reflect primarily the economic self-interest of bazaar elite, who sense an opportunity to put the brakes on reforms that threaten their unique capacities for lucrative arbitrage. Protests are being co-opted as a political tool at the expense of genuine civil society mobilization.

FATF Faces Test of Fairness on Iran at Plenary Meeting

FATF Faces Test of Fairness on Iran at Plenary Meeting

Fatemeh Mahjourian
Economy

◢ Iran is facing the end of a four month extension given by the Financial Action Task Force (FATF) for the reform of the country’s AML/CFT regulations. Iran will be hoping for a further extension of the suspension of countermeasures at the June plenary of the FATF. Some FATF members have sought to characterize such extensions as exceptional. However, extensions are a common procedure, and FATF ought to treat Iran’s case in fair recognition of this fact.

New US Sanctions Target Operator of Iran's Presidential Aircraft

New US Sanctions Target Operator of Iran's Presidential Aircraft

Esfandyar Batmanghelidj
Economy

◢ The US Treasury Office of Foreign Asset Control on Thursday announced a new round of targeted sanctions designations, including sanctions on Dena Airways, the company which operates the Iran’s presidential aircraft used by Hassan Rouhani for official travel. The new sanctions follow the designation of Iran’s central bank governor, Valliollah Seif, and reflect a further targeting of the Rouhani administration.

Increased Competition Squeezes Air France in Iran

Increased Competition Squeezes Air France in Iran

Amir Noorbakhsh
Economy

◢ Air France recently announced the reduction of its flights from Paris to Tehran after first switching the service on the route to its subsidiary airline JOON. At a time of uncertainty surrounding the future of the Iran nuclear deal, the reduction of flights led to speculation that the move may have been influenced by the return of sanctions. But a look to the current competitive environment shows other significant changes to the market to which Air France was forced to react. 

They Want War With Iran, They’re Settling For Economic War

They Want War With Iran, They’re Settling For Economic War

Esfandyar Batmanghelidj
Economy

◢ On Tuesday, French officials convened a briefing for French business on possible responses to Trump’s reimposition of secondary sanctions. French Minister of Economy Bruno Le Maire reportedly cited the French parable that “money is the nerve of war” to describe what is at stake. He may be more correct than he realizes, as the Trump administration gears-up for an economic war on Iran.

Total CEO Pouyanné: Transatlantic Partners Risk Gifting Iran to 'China and Russia'

Total CEO Pouyanné: Transatlantic Partners Risk Gifting Iran to 'China and Russia'

Esfandyar Batmanghelidj
Economy

◢ Speaking on Thursday at the Center for Strategic and International Studies, a Washington D.C. think tank, Total CEO Patrick Pouyanné faced several questions about his company’s recently announced decision to wind down operations in Iran following the reapplication of secondary sanctions by the Trump administration. Pouyanné warned that the “Atlantic allies” risk giving “all the Middle East region to China and Russia.”

Ambiguity in Trump Sanctions Could Put Humanitarian Trade with Iran at Risk

Ambiguity in Trump Sanctions Could Put Humanitarian Trade with Iran at Risk

Esfandyar Batmanghelidj
Economy

◢ In the years when Iran was under broad international sanctions, the country saw shortages in key foodstuffs and life-saving medicines. Despite attestations to the contrary, international sanctions hurt the Iranian people in cruel ways. As Iranians prepare for the return of U.S. sanctions, concerning ambiguity in OFAC’s new sanctions guidance may undermine the longstanding exemptions for humanitarian trade and the carve-outs for the Iranian banks which facilitate these sales.

U.S. Sanctions on Iran Set to Return: A Simple Explainer

U.S. Sanctions on Iran Set to Return: A Simple Explainer

Julia Pfeil
Economy

◢ On 8 May 2018, U.S. President Trump announced that the United States “will withdraw from the Iran nuclear deal” and that the United States “will be instituting the highest level of economic sanctions”. At the same time, U.S. authorities announced that U.S. sanctions would be re-instated, at the latest by 4 November 2018. What does this mean for companies who have ties to Iran or who do business in Iran?

Iran’s Currency Crisis Spurs Action in Financial Reform Efforts

Iran’s Currency Crisis Spurs Action in Financial Reform Efforts

Navid Kalhor
Economy

◢ Forced to respond by Iran’s recent currency crisis, the Central Bank of Iran is approaching regulatory reform in the financial sector with new energy. A critical deadline to meet standards set by the Financial Action Task Force is forthcoming in June. Iran needs to demonstrate progress in tackling financial crime estimated to include at least USD 27 billion in transactions annually.

Iran’s Energy Sector Takes Stock After Year of Ambivalent Results

Iran’s Energy Sector Takes Stock After Year of Ambivalent Results

David Ramin Jalilvand
Economy

◢ The last Iranian year, which ended in March, saw several interesting developments for Iranian energy, both domestically and internationally. Despite persistent challenges, Iran is keen to build on the momentum of last year’s developments. In doing so, the question of whether the Trump administration will stay in the JCPOA and renew sanctions waivers on May 12 will have great importance.

For Iran Warehouse, ‘Unglamorous’ Logistics Real Estate Offers Resilience and Returns

For Iran Warehouse, ‘Unglamorous’ Logistics Real Estate Offers Resilience and Returns

Esfandyar Batmanghelidj
Economy

◢ The logistics industry in Iran is burgeoning with international players such as DHL Freight and Maersk Line connecting Iran's supply chains to the world. But Iran's logistics infrastructure remains underdeveloped. Iran Warehouse is making a big bet on logistics real estate and is building Iran’s first true Grade A warehouse park—a 60,000 square meter development in West Tehran. 

Rouhani Government Unifies Iran’s Exchange Rates in Decisive Move to Stabilize Currency

Rouhani Government Unifies Iran’s Exchange Rates in Decisive Move to Stabilize Currency

Esfandyar Batmanghelidj
Economy

◢  In a decisive move intended to stop the further devaluation of the rial, the Rouhani government announced it would unify the official and free market dollar exchange rates, settling on an official rate of IRR 42,000. First Vice President Eshagh Jahangiri made the announcement last night, declaring that trading dollars above the new rate would be a serious crime. 

First OECD Complaint Filed Against a European Company for its Activities in Iran

First OECD Complaint Filed Against a European Company for its Activities in Iran

Gerald Pachoud
Economy

◢ The filing of a complaint against Italian telecommunications firm Italtel under the OECD Guidelines for Multinational Enterprises for its business activities in Iran is a warning about the scrutiny and politicized climate surrounding investment in the Islamic Republic. But companies can navigate these claims succesfully if they remain committed to responsible business and proactive monitoring. 

Iran Air Expands Routes Amid Uncertainty

Iran Air Expands Routes Amid Uncertainty

Amir Noorbakhsh
Economy

◢ Despite recent uncertainty surrounding the 2015 nuclear deal, Iran Air has been moving forward with its expansion efforts, drastically changing its face in the airline industry.

◢ Iran Air's network has grown significantly since 2015, but remains much smaller than that of a decade ago. In 2002, the airline was serving 18 European destinations, compared to today’s 13 destinations.

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