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How business could be hit by Iran deal pull-out

Donald Trump's withdrawal from the nuclear deal with Iran threatens to put billions of dollars worth of trade in jeopardy. How will different companies and sectors be affected?
Who does business with Iran?
All manner of companies, including Total, Accor, Volkswagen, Boeing, Airbus, Renault, PSA Peugeot Citroen, Sanofi, General Electric and Siemens, to name a few.What business are they doing?The main areas are in the oil and gas, petrochemicals, aviation, industrial software and car-making sectors.How much do they stand to lose?Impossible to say, given the commercial confidentiality of some contracts and the complexity of supply chains.But the show-stoppers are in aviation - Airbus has orders from Iran worth $20.8bn and Boeing orders worth a further $17bn.IranAir had ordered 100 and 80 jets respectively from the pair, plus a further 20 from ATR, a Franco-Italian maker of turbo-prop aircraft.What will be the knock-on effects to supply chains?Immense. All of the aircraft deals, for example, are going to be difficult to fulfil due to the intensive use of US-made parts in commercial aircraft.
How business could be hit by Iran deal pull-out

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Renault is one company that will be affected by the sanctions
How about the oil and gas sector?Potentially the biggest two companies affected are Royal Dutch Shell and Total.Shell has been licensing its petrochemical technology to local Iranian partners and in December 2016 signed a provisional deal with the Iranian government to explore three gasfields in the country.Total, meanwhile, has committed $1bn to develop the South Pars field, the world's largest gas field.Wary of a re-imposition of sanctions, the French giant has been careful not to use US software or technology in any of the work it is doing there, while it has also not employed any US citizens.BP has been more reluctant to commit to any investment in Iran because it felt the nuclear deal was quite imprecise in stating what businesses could or could not do.It opened an office in Tehran after the nuclear deal but, unlike Total and Shell, decided last year not to take part in the first auctions of exploration and production rights in Iran.BP insisted this was a commercial decision - but it was noted at the time that it is more exposed to the US than either Total or Shell, has an American chief executive and a bigger proportion of US shareholders than the other two.What about UK companies?Trade between the UK and Iran has not taken off in the way it has between Iran and some other European countries.British Airways resumed flights to Tehran in 2016 but it is not a significant market for the carrier.
Debenhams has reopened some stores in the country.British American Tobacco's Dunhill and Kent cigarette brands are popular in the country and BAT is the second-biggest supplier to the Iranian market but has recently been losing market share to market leader Japan Tobacco International.
How business could be hit by Iran deal pull-out

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UK retailer Debenhams has reopened some stores in Iran
What about businesses in Iran itself?The sector most likely to be hit is the oil industry.Iran is the third largest producer in Opec and in April was exporting 2.7 million barrels per day - or around 3% of global demand.It is likely to continue selling oil on an "under the counter" basis but will have to offer buyers discounts in order to do so.The biggest single buyers of Iranian oil are China, South Korea, Turkey, Japan, Italy and India.Chinese-owned Sinopec alone accounted for 300,000 barrels per day. Total has also been buying some Iranian crude to refine in its own refineries.Any other industries?Tourism to Iran, which had started to grow in recent years, could be hit.Visitor numbers to Tehran have tripled during the last two years to hit 400,000 in 2017.Iran has also in recent months been exporting carpets to the US and elsewhere.What about the banking sector?Most western banks steered clear of doing business in Iran, even after the nuclear deal, several of their number - notably Standard Chartered - having previously been punished for doing business with Iranian counter-parties.Three Iranian banks - Melli Bank, Bank Sepah and Persian International Bank - have subsidiaries with licences to operate in Britain, but have not found any local commercial banks prepared to clear their payments in sterling.Reuters reported last year that even the Iranian embassy has been unable to open a UK bank account.Which countries stand to lose most?China and the United Arab Emirates are Iran's two biggest trading partners, with the EU next.Within that, Germany has historically had most trading ties with Iran, with exports to the country worth $3.1bn in 2016 - up 26% on the previous year.
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French exports to Iran are worth around half that.But other EU countries have also seen a steady uptick in trade with Iran since the nuclear deal was struck, notably Spain, the Netherlands and Italy. China alone buys almost a quarter of all exports from Iran.
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