Iran nuclear talks: These UK sectors will be in a seriously good place if a deal is reached tomorrow

Tomorrow is the deadline for a nuclear deal between Iran and other foreign powers, which would involve the removal of economic sanctions against Iran in return for a curbing of its uranium enrichment programme. 

 

 

At the moment, the country's economy is seriously hindered by limits on international trade, but those on the other side of the negotiating table – the US, UK, France, China, Russia and Germany, will not lift sanctions until they are confident Iran's enrichment is low enough that a nuclear weapon definitely couldn't be created. 

 

Talks have been taking place for a long time, and the deadline has been pushed back on more than six occasions since November last year. Once again, both sides of the negotiating table are expressing doubts that an agreement will be reached tomorrow. 

 

 

US secretary of state John Kerry said “hard choices” would need to be made for tat to happen, and warned that neither party is where it “needs to be on several of the most difficult issues".

 

He still expressed some hope. However: "If hard choices get made in the next couple of days and made quickly, we could get agreement this week.”

 

If an agreement is reached, it's not just Iran that will benefit economically – a whole host of opportunities will open up for western economies, too, including for the UK. Iran has a consumer market as large as Germany's, an economy with a stock market the size of Poland's, and a telecoms market with 55m mobile phone owners.

 

So, if sanctions are lifted tomorrow, these are the UK sectors set to benefit.

The current sanctions do not apply to pharmaceuticals, which means that the UK is theoretically allowed to export medicines to Iran.

 

In practice, however, this is not what happens – there is an informal financial boycott on Iran imposed by the US, and this inadvertently also impacts the UK. Banks with US operating won't process the payments, which means the amount of trade that can be done is limited.

 

By lifting the sanctions, the UK's pharmaceutical industry would be free to create its own pharmaceutical trade relationship with Iran. 

Iran is capable of making a wide range of its own goods, from breakfast cereal to generic household items.

 

But because of the sanctions, it is no longer able to get hold of the advanced equipment it needs to make these at a quality that would satisfy most middle-class Iranians.

 

If sanctions are lifted, Iran will start purchasing more advanced technology and equipment from western economies like the UK.

Iran has the world's fourth-largest oil reserves, and it is considered to have great potential for large-scale production at low cost. 

 

While the Iranian government says it could soon add an extra 1m barrels of oil to its current production of 2.8m barrels a year, experts argue this would only be possible using western cash and technology made available through an easing of sanctions. 

 

BP is one British oil company that was thrown out of Iran in 1979, and it may well seek to return and make the most of the country's lucrative opportunities following a deal. 

UK shipping companies that transport Iranian oil will also come out very well from fewer sanctions, as their shipping routes will be less restricted and it will be possible for them to deliver Iranian oil to major markets like Turkey and India. 

Before sanctions were imposed, Iran's car and lorry market was the 10th largest in the world. Now, western companies such as Renault, Peugeot and General Motors are gearing up to return to the market.

 

Although they are not currently searching for opportunities there, British firms will also benefit from the huge pool of opportunity in the automotive sector.