Removal of sanctions on Iran could benefit Asia

 

The historic agreement reached between Iran and six world powers on July 14 to limit Iranian nuclear activity in return for easing international sanctions portends a new era -- with mixed implications for the rest of the world.

     U.S. conservatives have warned that the deal will "embolden" Iran and pariah states such as North Korea. The U.S. Congress has 60 days in which to consider the deal, though President Barack Obama has said he will veto any attempt to block it.

     Analysis of the broader impact of the Iran deal has so far focused mostly on Tehran's relations with the West. However, the easing of sanctions on Iran will also lead to significant gains for Asia.

      China, in particular, stands to advance its rapidly growing interests in Iran, while India and Japan will undoubtedly launch a push to reap their respective benefits. More generally, Asian economies will stand to gain from increased investment opportunities and Iran's higher hydrocarbon production.

     Ultimately, reduced sanctions will allow Iran to export more oil and gas. This is important for Asia, which is the world's largest petroleum-consuming region. China, Japan, India and South Korea alone account for one fifth of global oil demand. Despite an economic slowdown, China still remains the second-largest oil consumer in the world after the U.S. Conversely, as China tries to reduce its greenhouse gas emissions, its demand for natural gas will also rise. Asian Review Nicholas Borroz