Iran's football team is having an unexpectedly good World Cup, but it's not the only Iranian team scoring big wins. In Switzerland, Iranian negotiators have secured a significant concession from the US, with the Treasury Department issuing a sanctions waiver permitting the production, sale, and delivery of Iranian petroleum for 60 days.
The move will bring instant relief to the Iranian regime and could make Iran rich again. However, experts say the concession may not yield the expected results, as Iranian crude was already flowing more freely due to the lifting of America's blockade of Iran's ports.
The price of Brent crude has barely moved since the concession was announced, suggesting that markets were already pricing in a surge in Iranian shipments. For exports to rise much higher and prices to come down further, Iran must find new buyers for its oil, but this may be difficult due to European and British sanctions remaining in place.
Additionally, the reputational risk of doing business with Iran remains a concern for many potential customers. As a result, Western purchases are unlikely to revive before a permanent deal is sealed.
The sanctions relief may also not achieve the clarity America hopes for in keeping the Strait of Hormuz open. Iran has already declared the strait closed again, and tensions between America and Iran are rising.
For Iran, the concession is a blessing, hastening the recovery of exports and enabling curbed production to restart. If the licence is renewed indefinitely, Iran could attract a bigger and more diverse group of buyers, making it one of the Gulf's richest states within a decade.
