Who Is Being Hurt By America’s Anti-Iran Sanctions

While the United States seems stuck on increasingly using sanctions against many nations in the world, particularly the Russian Federation, Somalia, Syria, Yemen, North Korea, Libya and Iran, the imposition of sanctions has provided business opportunities that would not otherwise have existed.  This is particularly the case for Russia and Iran who have recently inked a multi-billion dollar deal that may otherwise have gone to an American company.

According to the Tehran Times, the voice of Iran, Iran has signed a deal with Russia to jointly manufacture passenger and cargo train cars worth €2.5 billion.  The deal was signed by Iran’s Industrial Development and Renovation Organization (IDRO) and Russia’s Transmashholding, Russia’s largest manufacturer of rail locomotives and other equipment.  The joint company that the two parties are forming will be owned 80 percent by Russia and 20 percent by Iran with all funding coming from Russia.  Given Iran’s geographical position along China’s Belt and Road Initiative, it is quite logical that Iran would want to develop its rail industry to play a role in trade between the Far East and Europe.

Here is a screen capture showing the signing of the deal:

Let’s look at more details about Iran’s Industrial Development and Renovation Organization, the nation’s industrial driving force as well as looking at deals that Iran has completed with other non-sanctioning nations other than Russia.  IDRO was established in July 1965 with the mandate of creating new industrial enterprises and renovating old enterprises to increase Iran’s industrial base.  IDRO’s vision is to be “…a pioneer for propelling Iran to become the regional industry and innovation hub by Horizon 2025” through the following strategy:

– Promotion of local and foreign investments with minority holdings owned by IDRO (less than 50% of the shares) with particular emphasis on new, Hi-tech and export-oriented industries.

– Restructuring the existing industries through participation of reputable foreign companies in order to transfer new technologies and to enhance the non-oil exports of Iran.

– Development of general contracting activities with the participation of the Iranian private sector and credible foreign companies.

– Rendering consultancy and support services to foreign investors.

– Privatization of the existing subsidiaries.

As you will see in this posting, there are many opportunities for investment in Iran’s economy.

IDRO is responsible for many other projects, particularly in Iran’s oil and gas sector.  With Iran owning a significant portion of the South Pars Gas Field as shown here:

IDRO has partnered up with South Korean and Japanese companies to develop one of the world’s largest natural gas resources as shown here:

As well and as an aside, since Western sanctions were loosened, France’s Total has signed a 20 year, two-phase deal with the first phase being worth $2 billion to drill 30 wells and install two wellhead platforms in the South Pars field (Phase 11), partnering with China’s National Petroleum Company (CNPC) and Iran’s Petropars as shown here:

The second phase will be launched once reservoir conditions require additional drilling and infrastructure installation; the final total cost could be up to $5 billion.

The absence of American companies has led to significant investments in Iran’s key natural resource by CNPC since 2004 with the focus on the NIS oifield, the North Azadegan project, the Zagreb Basin in southern Iran and the aforementioned South Pars field as you can see here:

…and here:

Let’s go back to IDRO for a moment.  IDRO is also assisting in the development of shipbuilding, particularly as it relates to oil and gas production:

IDRO is also working on a significant number of high-tech projects as shown here:

As you can see from this posting, there are a significant number of economic opportunities in Iran that are being blocked by Washington’s sanctions.  The imposition of increasing sanctions has forced Iran to partner with other nations, most particularly China and Russia.  Given that Iran has the world’s second-largest proved reserves of natural gas as shown here:

…and fourth largest proved reserves of crude oil as shown here:

…it would appear that America’s anti-Iranian sanctions (and anti-Russian sanctions for that matter) are punishing Americans rather than their intended targets.  I guess it’s just another example of unintended consequences of poorly thought out geopolitical manoeuvring.  As well, the fact that American sanctions are impacting the economies of both Russia and Iran has created a  strengthening of the economic partnership between the two nations, again, to the exclusion of the United States.  In a future posting, I will take a more in-depth look at the growing relationship between the Russia and Iran and how this marriage of convenience is evolving. 

Click HERE to read more from this author.


How would you rate Donald Trump's presidency so far?

View Results

Loading ... Loading ...

Related Articles

Be the first to comment

Leave a Reply

Your email address will not be published.


*


Confirm you are not a spammer! *