The Impact of Economic Sanctions and the JCPOA on Energy Sector of Iran

Abstract

International sanctions and political uncertainty have clouded Iran’s economy and have made some foreign business and investors wary of Iran. UN and some US sanctions are targeted toward obstructing Iran’s development of its oil and gas sectors to constrain Iran’s resources for uranium enrichment and alleged terrorist financing. The research examining the effects of sanctions on the energy sector of Iran reviews the history of the impact of the sanctions, and identifies key characteristics associated with the sanctions on the Iranian energy sector. This article provides a range of data and estimates on the impact of sanction on Iran’s petroleum production, exports, and economy, and the impact that full implementation of the Iran nuclear agreement could have on Iran’s exports and economy. It also reviews the process of sanctions relief. Finally, the article concludes with a policy proposal designed to take advantage of the historic Joint Comprehensive Plan of Action (JCPOA) agreement specifically advocating for the application of the concept of ‘oil diplomacy’.