Iran, world powers said to have reached nuclear agreement

Vienna: Iran and six world powers sealed a historic accord to curb the Islamic Republic’s nuclear programme in return for the lifting of sanctions, capping two years of tough diplomacy with the biggest breakthrough in relations in decades.

Diplomats reached an agreement in Vienna, according to an official involved in the talks, who asked not to be identified and didn’t elaborate on the details of the deal. “Our efforts reached fruition,” Iran’s Fars news agency quoted an unidentified diplomat as saying.

The accord will curb Iran’s nuclear program in return for an easing of sanctions that have crippled the Islamic Republic’s economy. It promises to end a 12-year standoff over Iran’s nuclear activities that has at times drawn threats of military action from the US as well as from Israel, which has indicated it will lobby American lawmakers to reject the deal.

With new flows of Iranian oil expected to hit an oversupplied market, Brent, the global benchmark, fell as much as 2.1% to $56.63 a barrel at 7:57 am in London.

For the US, grappling with a 35-year estrangement from the Islamic Republic, the pact will probably face further hurdles. Congress now has 60 days to review the document, where it will meet resistance from lawmakers who have opposed making nuclear compromises with Iran.

Should the deal survive review, it would become one of the biggest foreign policy achievements for President Barack Obama, who kicked off the talks in a phone call with Iranian President Hassan Rouhani almost two years ago.

Takes months

Full implementation of the agreement would take months and is contingent on the pace at which Iran meets its obligations. Over time, the lifting of sanctions would enable the oil-rich nation to ramp up its energy exports, access international finance and open the doors to global investors.

The deal will reverberate across the Middle East, where Shiite Iran’s prominence has been growing amid a regional conflict with Sunni Muslim extremists, alarming Gulf rivals led by Saudi Arabia. Iran is a key backer of embattled governments in Iraq and Syria, and supports rebels who control Yemen’s capital, as well as Lebanon’s powerful Hezbollah militia.

In China, Europe and Russia, the agreement will be welcomed by companies eager to access an untapped market of 77 million people.

An economy bigger than Thailand’s and oil reserves rivaling those of Canada make Iran the most important market still closed to major equity investors, according to investment bank Renaissance Capital.

Lifting sanctions could open the Islamic Republic’s stock market to investors in early 2016, Renaissance’s Charles Robertson and Daniel Salter wrote in a report on Monday. Inflows could total $1 billion in the first year, they said. Bloomberg