Julian Hattem and Devin Henry write: U.S. companies won’t be rushing in to do business in Iran, even once the terms of the landmark nuclear accord go into effect.
Lawmakers have been unable to kill the terms of the agreement on Capitol Hill, but lingering sanctions and the threat of new action will prevent the vast majority of American companies from setting up shop in Iran — even while their foreign competitors race in.
In fact, except for caviar, carpets and a few other specific areas, the U.S. economic relationship with Iran won’t change much at all.
The nuclear deal lifts sanctions on Iran’s oil and financial sectors in exchange for limits on its ability to build a nuclear bomb.
The vast majority of U.S. sanctions, however, will only be lifted on foreign companies — not American firms.
Once regulators certify that Iran has taken a number of steps to shut down its nuclear program — which won’t happen for a few months — some industries will have a small amount of flexibility.
The most notable is civilian aircraft materials, of which Iran is in desperate need.
The U.S., in return, will allow imports of Iranian carpets and foodstuffs including caviar and pistachios. Those shipments serve a symbolic purpose but aren’t likely to have a transformational effect on the Iranian economy, analysts said.
In any case, corporate America doesn’t appear to be chomping at the bit to rush in to Iran, which may be in part due to the threat of new sanctions from Congress..
While many American firms will be on the outside looking in at Iran, the deal will lift most United Nations and European Union sanctions on Iran, which could open the floodgates for foreign firms..
The main target of that foreign activity is likely to be energy, though the degree to which American firms get in on the game remains a question mark.
Federal analysts say the country has up to 30 million barrels of oil in storage and could grow its production by up to 700,000 barrels a day once sanctions are lifted.
Iran’s oil minister said in May that “we will witness involvement” of American firms once that happens, but even companies bullish on the prospects aren’t moving quickly to confirm their involvement.
Royal Dutch Shell told The Hill in May that the company is “interested in exploring the role Shell can play in developing Iran’s energy potential,” but a spokesman Wednesday said only that that position still stands.
Sen. Bill Cassidy (R-La.), a member of the Senate Energy and Natural Resources Committee, said he doesn’t expect many U.S. companies to join the parade to Iran, citing uncertainty about the stability of the country’s legal system and its lax environmental regulations.
But other countries, Cassidy predicted, are ready to move in when they can.
“The Chinese are going to be the ones who benefit the most in terms of trade, and then the Russians and then the Germans,” he said. “I don’t think the American companies would be anywhere close to it.”
“This is an incredible deal — if you’re in another country, starting with Iran.”
