Lifting of US-led international sanctions on Iran will lower global oil prices by USD 10 per barrel next year, the World Bank said today forecasting that countries like India, China and Britain would have greater trade relationship with Tehran in the future.
As a result of the lifting of international sanctions in the aftermath of Iranian nuclear deal, the World Bank also expects economic growth in Iran to surge to about five per cent in 2016 from three per cent this year.
The World Bank, in a statement, said if the agreement reached on July 14, is ratified, sanctions on Iran by the United States and the European Union will be removed in return for Iran decelerating its nuclear programme.
The World Bank's Middle East North Africa (MENA) Quarterly Economic Brief -- Economic Implications of Lifting Sanctions on Iran, sees Iran's capacity to export more oil as speeding its economic recovery.
But the report projects lower export earnings and revenue for MENA's other oil exporters, such as the Gulf States and Libya, while oil importers in the region, such as Egypt and Tunisia, will benefit from lower world prices.
"Just as the tightening of sanctions in 2012 led to a sharp decline in Iran's oil exports and two years of negative growth, we expect the removal of sanctions to boost exports and revive the economy," said Shanta Devarajan, World Bank Chief Economist for the Middle East and North Africa region.
Iran's cost of doing trade will also fall, increasing not just the volume but the value of its oil trade and non-oil trade.
The World Bank's report estimates that exports from Iran will eventually increase, too, by about USD 17 billion, which is about 3.5 per cent of its GDP.
Britain, China, India, Turkey and Saudi Arabia are among the countries most likely to see the largest rise in post-sanctions trade with Iran, the World Bank said.
Foreign direct investment may increase to about USD 3 billion a year, double the current rate but still lower than its peak in 2003.
