Iran exports are up but investment in its infrastructure is lagging

Fuel Fix:
More than a year after the United Nations lifted sanctions against Iran, crude exports from Iran have come roaring back.

Iranian Oil Minister Bijan Namdar Zanganeh says the country exported more than 3 million barrels on a single day last month, the highest level seen since the late 1970s, according to Bloomberg News.

But a the same time, investors have not been flooding back into the country since the United Nations reached a deal with Iran over its nuclear enrichment program, said Suzanne Maloney, a senior fellow at the Brookings Center for Middle East Policy.

“There’s been a considerable increase in traditional European sources of investment, like Germany and Spain, in automotive, industry and to some degree energy. But it’s slow progress,” she said, speaking at CERAWeek by IHS Markit. “The expectation there would be a quick bounce back from sanctions was over sold to the Iranians and this is the political dilemma the Iranian government faces.”

The possibility that President Donald Trump will take action against Iranian financial institutions associated with terrorist groups is creating further uncertainty for investors, Maloney said.

Iran’s attempt to reboot its economy comes at the same time the Middle East at-large is working to figure out a strategy for dealing with uncertainty in the oil markets, forcing heavy borrowing from governments in order to maintain their domestic economies.
I think an investment in Iran would carry a higher than normal risk.  Its belligerence makes it more likely that sanctions will be reimposed and they could be even more severe, especially if Iran continues to test offensive missile systems and take hostile actions toward US shipping.

Iran is also a regime whose word is not reliable.  The Iranian leadership believes it is OK to lie and participate in fraud to get their way.

Meanwhile, Iran is spending billions on new weapons and on its infrastructure of terror.


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