Investors wary of Iran deal

Fuel Fix:

For every investor who sees opportunity in a post-sanctions Iran, there are others who see the same old legal morass.

The Islamic Republic is banking on a nuclear accord with world powers to unleash a flood of foreign cash into an economy crippled by decades of sanctions. Companies including Royal Dutch Shell Plc, BP Plc and Total SA say they’re willing to invest in the OPEC member.

Major investments, however, may take years as companies weigh the risk of Iran violating the agreement, which would bring sanctions back, according to analysts and former officials. Decades of hostile relations with Western powers and tight scrutiny by the U.S. Congress and Treasury could also make many investors reluctant to jump back right away.

“Businesses have become terrified about doing business with Iran, and it’s not easy to un-terrify them,” says Trita Parsi, president of the National Iranian American Council.

Iran and six world powers led by the U.S. are holding talks in Vienna to reach a comprehensive accord to curb the Islamic Republic’s nuclear program in return for removing sanctions that have crippled its economy. Diplomats expect the negotiations to go beyond the self-imposed June 30 deadline.

“Nobody will be rushing to invest as they assess the likelihood of cheating by the Iranians,” says Richard Nephew, a former U.S. nuclear negotiator.
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Obama's so called snap back sanctions in the event of cheating make any long term investment have higher risks.  With Iran's reputation as a cheater it makes it likely that some form of sanctions will be back in place and the investors would potentially lose everything in that circumstance.   However, those wary about the deal have also raised questions about the ability to reimpose sanctions once they are lifted.  There is good reason not to trust Iran either way.