Lifting Iran’s sanctions ‘will lower oil prices’

The removal of sanctions to Iran’s nuclear programme could reduce the price of oil by $10 (£6.4) per barrel next year. That’s the prediction of the World Bank which explained this […]

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By Jacqueline Echevarria

The removal of sanctions to Iran’s nuclear programme could reduce the price of oil by $10 (£6.4) per barrel next year.

That’s the prediction of the World Bank which explained this could happen prices could fall as the country increases oil production.

It added the cost of Iran’s trade will fall and exports from the nation would increase by around $17 million (£10.8m) – 3.5% of its GDP.

The UK, China, India, Turkey and Saudi Arabia are the countries most likely to see the largest rise in post-sanctions trade with Iran.

The World Bank also expects economic growth in the country to rise to 5% in 2016.

Although oil importers such as Egypt and Tunisia would benefit from lower oil prices, its report added export earnings and revenue for MENA’s (Middle East and Nnorth Africa) oil countries such as the Gulf States and Libya would decrease.

Lili Mottaghi, World Bank MENA Economist and the author of the report said: “Since the framework agreement of April 2015, we have seen increased interest from multinational companies in investing in Iran, especially in the oil and gas sector. That trend is likely to accelerate with the lifting of sanctions, providing much-needed capital and upgrading of technology to Iran’s oil sector.”