The International Atomic Energy Agency, which reports jointly to the United Nations General Assembly and to the Security Council, has declared that Iran had conformed to the requirements under last June’s Joint Nuclear Arms Agreement. Accordingly, the economic sanctions against it have been lifted. That means that Iran is now able to buy imports and sell its exports on the global markets, and also to access its country’s frozen financial assets.
While Iran was under the sanctions, its economy went substantially downhill. The nation could not access the global marketplace, and with its financial assets frozen, it did not have the dollars or other “hard” currencies with which to trade. Now, don’t expect the Iranian economy to turn-around overnight? But, keep in mind that it has been preparing for this, with the heads of many Western nations, and a coterie of business leaders, having traveled to Tehran before the ink was even dry on the Agreement.
Politically speaking, the American Republican Party seemed to have teamed-up with the Middle Eastern “Odd Couple”—Israel and Saudi Arabia—as each of them had promised that Iran would use the access to those financial assets to build a nuclear bomb. There are two problems, however, in that scenario: the Iranian government needs to use most of those funds to jump-start its economy, lest it risks another “Green Revolution”, as in 2009; and the “break-out period” required to build a nuclear bomb, is now twelve months, as compared to two-to-three months, before the Agreement.
Recently, the price of oil on the global markets had fallen below $30 per barrel (for WTI, with Brent just slightly higher). As Iran adds its oil to the global export marketplace, the price should continue to remain low for some time to come. Also, since many of the nations that rely heavily on petrodollars are autocracies, that will surely have an impact as to what extent they might continue to suppress their citizens.
Various elements outside of Iran differ as to who will win the internal political conflict, between the hardliners—the Supreme Leader Ali Hosseini Khamenei, the clerics and the Military—as compared to the more moderate faction, led by President Hassan Rouhani and Foreign Minister Mohammad Javad Zarif. I believe that they might be using the carrot-and-stick approach, with the hardliners taking a firm stance for domestic consumption, and the moderates acting more rationally on the world stage.
Lastly, keep in mind that much of the Iranian hierarchy is quite elderly, while Iran is a country of mostly younger, highly educated people who seem to prefer a more liberal, secular lifestyle. So, the real question might be: how much longer the old guard can hold-out?