The United States and the European Union lifted a raft of sanctions on Iran after the United Nations atomic watchdog announced on Jan 16 that the country had fulfilled its obligations under a landmark nuclear agreement signed with world powers last year.
The sanctions imposed over Iran's disputed nuclear programme had crippled its economy for a decade.
Sanctions not linked to the nuclear accord will remain in place.
Here's a quick look at the sanctions and what it means for Iran and the rest of the world:
What sanctions were lifted?
The EU lifted all its nuclear-related economic sanctions, including an embargo on buying Iranian crude oil, as well as restrictions on Iranian trade, shipping and insurance. Besides removing sanctions on entire sectors, Iranian entities or individuals who were blacklisted because of their alleged nuclear-related activities can now do business with the EU.
The US dropped its "secondary sanctions" banning third country actors (i.e. non-Americans) from certain trade and investment with Iran. These include sanctions on:
* Finance and banking, including dealings with the Iranian central bank
* Underwriting services, insurance and re-insurance
* Iran's oil, gas and petrochemical sectors
* Business with Iranian shippers, shipbuilders and port operators
* Trade in gold and other precious metals
* Trade in graphite, raw or semi-finished metals such as aluminum and steel, coal and software for integrating industrial processes - where such items are not used in nuclear research banned under the deal
* Automotive sector
* Associated services for each of the categories above
The United States has also removed 400 names of individuals, companies and entities from lists of sanctions evaders and those connected to the Iran nuclear programme.
While US companies will still be barred in many cases from directly doing business with Iran, the deal allows trade in three specific areas :
* US companies will be allowed to export commercial aircraft and spare parts to Iran's creaking fleet, as long as they are not used for military transport or activities banned under the nuclear pact.
* US-owned or managed companies based abroad will be given a general permission to trade with Iran.
* Iranian producers will be permitted to export to the US carpets and food - including pistachios and caviar.
If Teheran violates any of its commitments under the nuclear deal, the UN Security Council can initiate proceedings to reinstate sanctions under a so-called "snapback" mechanism.
What sanctions remain in place?
Sanctions not linked to the nuclear accord will remain in place, including European sanctions linked to human rights and US sanctions linked to terrorism. Embargoes on the sales and exports of conventional weapons and ballistic missile technology will also remain in place - five years for conventional weapons and eight years for ballistic missile technology.
How will Iran benefit economically?
The most immediate benefit to Iran will be access to roughly US$100 billion (S$144 billion) of its money that was frozen in foreign accounts. Analysts estimate that of the total amount, roughly half has already been committed to other obligations, such as payments to foreign creditors including China.
Iran will also be able to sell as much oil as it likes. But with the collapse of the oil market - prices have fallen 70 per cent in the past 18 months - the country will derive far less revenue than it had anticipated, and Iranian sales could further depress prices.
In addition, as financial sanctions are eased against Iran, foreigners can enter a bourse in Teheran with almost as many listed companies as Istanbul. Inflows may reach as much as US$1 billion after six to eight months, says Mr Reza Soltanzadeh, a founding partner at ACL Assets Management.
The lifting of the sanctions, which have added 15 per cent to the cost of trading with Iran, will also save the country some US$15 billion yearly in cheaper trade, says Iran's first Vice-President Eshaq Jahangiri.
Iran could boost its Gross Domestic Product growth to around five per cent in 2016-17, from almost zero currently, says the International Monetary Fund.
How will the rest of the world benefit?
One of the biggest benefits will be cheaper oil prices. Iran will be able to export as much crude oil to the world as it can, or as much as it can find demand for. Teheran says it will hike sales by 500,000 barrels and increase total exports to around 2.5 million barrels within the next year. This will push the price only one direction: downwards.
The market is already flooded by cheap oil and there will be many more barrels in the market than there are buyers. Iran also plans to offer discounts on prices that are already the lowest in 11 years.
This could trigger a price war with rival Saudi Arabia, which is trying to keep its own market share by selling under the market price.
In addition, non-American companies will be able to resume business with Iran without being punished by the US.
As the cost of doing trade with Iran will fall , countries like Britain, China, India, Turkey and Saudi Arabia will most likely see the largest rise in post-sanctions trade with Iran. Foreign direct investment may increase to about US$3 billion a year, double the current rate but still lower than its peak in 2003.
SOURCES: REUTERS, NEW YORK TIMES, BBC, AGENCE FRANCE-PRESSE, BLOOMBERG
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