Iran’s Foreign Minister Mohammad Javad Zarif and ministers from six world powers are expected to hold their first full session today in the current round of talks on Tehran’s nuclear programme.

Representatives from the US, France, Germany, the UK, China and Russia have arrived in Lausanne, Switzerland, in an attempt to reach an agreement on limiting Iran’s nuclear development in exchange for relief for economic sanctions.

Iran and the P5+1 world powers have been in talk for nuclear talks for 18 months since the breakthrough interim agreement was signed in Geneva and are now aiming to reach a deal by a self-imposed 31-March deadline.

Crunch time for Iran talks

Mark Watts explains the likelihood of the two sides reaching an agreement, the impact any agreement will have on Iran’s economy and what could happen if a deal is not reached.

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Iran talks due to end

The US State Department said it expects talks to intensify as the two sides assess whether an understanding is possible.

The end of sanctions could drive significant overseas investment into the country’s ailing oil and gas industry. Iran has announced plans to tender 17 oil and gas blocks to international oil companies (IOCs), but there is little interest while sanctions remain in place.

Tehran could also immediately ramp-up oil exports, leading to downward pressure on global crude prices as Iranian crude floods an already oversupplied market.

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Caution for oil companies eyeing Iran investment

  • Iran has the world’s fourth-largest oil reserves and second-largest gas reserves
  • Oil companies likely to face delays even if sanctions eased
  • Companies will need to ensure they don’t unwittingly break any sanctions left in place

Hopes and fears for Iran nuclear deal

  • Iran’s economy would be the biggest winner if a deal is reached
  • It would give Iran access to investment to improve its infrastructure
  • Israel and Saudi Arabia fear Iran is becoming a major Middle East influence by the back door

Transport sector in need of sanctions relief

  • $1bn of rail projects under study
  • Access to finance main problem for projects
  • Aviation industry in desperate need of new aircraft

Nuclear deal could see bank restrictions ease

  • Some banks allowed to deal with Iran within very narrow boundaries
  • Iran remains excluded from Swift – the global bank messaging system
  • Any easing of trade restrictions will need support of banks to fund trade flows

Iran negotiations move into the final stage

  • World leaders arrive in Lausanne for Iran nuclear talks
  • France and Germany joint US and Iran in talks
  • Sides hope to reach agreement by 31 March

Iranian oil could cause problems

  • Reports suggest Iran has stored as much as 35 million barrels
  • Ability to sell the crude reliant on whether shipping and insurance sanctions are also lifted
  • Oil buyers likely to be lining up in the hope of securing a good deal on stored crude

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