International sanctions against Iran have been lifted after the UN atomic watchdog announced the country had complied with the terms of last July’s landmark deal aimed at scaling down its nuclear programme.

The sanctions have cost Iran more than more than $160bn (£102bn) in oil revenue since 2012 alone. Once they are lifted, the country will be able to resume selling oil on international markets and using the global financial system for trade. Iran has the fourth largest oil reserves in the world and the energy industry is braced for lower prices. Iran will also be able to access more than $100bn in assets frozen overseas.

Iran and the IAEA

Iran has completed the necessary steps in a deal to restrict its nuclear program, meaning international economic sanctions are lifted, officials from the EU and the U.N. nuclear watchdog agency said Saturday.

“Relations between Iran and the IAEA now enter a new phase. It is an important day for the international community. I congratulate all those who helped make it a reality,” said Director General Yukiyo Amano of the International Atomic Energy Agency.

US Secretary of State John Kerry, Iranian Foreign Minister Mohammad Javad Zarif, and other officials involved in the accord met in Vienna on Saturday as the diplomatic achievement unfolded.

The International Atomic Energy Agency (IAEA) said Tehran had put in place all nuclear measures required under the deal reached with six world powers.

Iran’s President Hassan Rouhani said it was a “glorious victory” for the “patient nation of Iran”.

International sanctions against Iran have been lifted after the UN atomic watchdog announced the country had complied with the terms of last July’s landmark deal aimed at scaling down its nuclear programme.

US Secretary of State John Kerry, Iranian Foreign Minister Mohammad Javad Zarif, and other officials involved in the accord met in Vienna on Saturday as the diplomatic achievement unfolded.

The International Atomic Energy Agency (IAEA) said Tehran had put in place all nuclear measures required under the deal reached with six world powers.

In a sudden, though well-choreographed and much-expected dramatic succession of news releases, Iran has emerged from years of economic isolation when the heavy shadow of crippling economic sanctions were lifted in exchange for a drastic curb in its nuclear programme.

“Iran has carried out all measures required under the [July deal],” according to reports, “to enable Implementation Day [of the deal] to occur,” the Vienna-based International Atomic Energy Agency has said in a statement,” paving the way for the lifting of these crippling economic sanctions.

In a no less dramatic announcement, deliberately designed to coincide with the lifting of these sanctions, Iran was also reported to have released five US citizens, including the much-publicised case of Washington Post reporter Jason Rezaian, as part of a prisoner exchange with the United States.

The release of billions of dollars of frozen Iranian assets will open a floodgate of European and international conglomerates to rush to Iran for lucrative contracts.

At a time when a dramatic drop in the price of crude oil has plunged all oil producing countries (and with them the world economy) in deep despair, the release of these funds amounts to a bonanza for Iranian economy – as if the world had created a safe deposit account for Iran to give it back in its time of need. In taking steps to halt its nuclear progress, Obama claimed, “the world has avoided another war.”

To meet the IAEA’s certification, Iran had to take a number of steps, including removing the core of its Arak heavy water reactor and filling it with cement.

The country also had to dismantle roughly 13,000 centrifuges and dramatically reduce its stockpile of low-enriched uranium, which was sent to Russia in December.

The US and the sanctions

The US has imposed fresh sanctions on Iranian companies and individuals over a recent ballistic missile test.The new sanctions prevent 11 entities and individuals linked to the missile programme from using the US banking system.

The move came after international nuclear sanctions on Iran were lifted as part of a deal hailed by President Barack Obama on Sunday as “smart”.

The only sanctions being lifted by the U.S. concern foreign companies doing business with Iran. The American embargo on Iran will remain in place, barring U.S. companies from engaging directly with Iran, with a few small exceptions for passenger aircraft, carpets and pistachios.

Additionally, existing U.S. sanctions will remain in place on Iranians connected to the country’s humans rights abuses and support for terrorism. While most US sanctions will remain in place, the lifting of EU sanctions will benefit a number of industries. The most significant beneficiaries are likely to be the financial, energy and transportation industries.

The impact on the financial industry

The financial industry will largely benefit from the lifting of sanctions that have, over the last three years, prohibited international banks from using SWIFT – the global payments system – to conduct business with Iran’s banks. Iran’s readmittance to SWIFT will lead to many new opportunities for international finance and banking. As financial transactions affect all types of industry there will be other significant opportunities that come from Iran’s access to the global payment system. (For more, see: Sanctions on SWIFT Could Hit Russia Where It Hurts Most.)

As Iran is home to the fourth largest proven crude oil reserves and second largest natural gas reserves, lifted sanctions represent a huge opportunity for global energy companies. While American energy companies will have a tougher time, European firms like Royal Dutch Shell (RDS.A) and Total SA (TOT) should see increasing business opportunities. But other oil industry-related companies such as those that build oil tankers or provide oil field services should also benefit from the opening of the Iranian market.

Although most US sanctions remain, the recent agreement, in removing EU sanctions, is a major step towards bringing Iran into the global economy. While US businesses and citizens will still find it hard to conduct business with Iran, European citizens and companies should begin to see significant benefits in the near term, with the financial, energy and transportation industries poised for considerable opportunities.

The impact on the Iranian economy

Iran is the second-largest economy in the MENA (Middle East and North Africa) region after Saudi Arabia, and the 18th biggest in the world, according to the World Bank. With a population close to 80 million people, it’s the second-most populous nation in the area, with 60% of its people under the age of 30. But youth unemployment is very high (17.9% for men and 39% for women), and that is one area the government wants to tackle. Its aim: Create 8.5 million jobs in the next two years, and fresh foreign investment should help.

Iran’s economy shrunk by 6.8% in 2012 and 1.2% in 2013, with sanctions blamed for a loss of $17.1 billion in export revenue in 2012-2014 — a 13.5% decrease, according to the World Bank. Since President Hassan Rouhani took office in July 2013, he has pulled the country out of recession and inflation is now down to 17% after skyrocketing to 40% two years ago, according to The Economist. When trade resumes, Iran’s GDP may rise to 5% from the current 2.8% rate, the World Bank forecasts.

However, for the American consumer, the biggest impact might be a lighter bill at the gas pump.

The oil factor and the uplift in Iran’s economy

When Iran begins selling its oil more freely again, global oil prices may drop 14% by 2016. Bloomberg reported that Iran has already started producing 2.8 million barrels a day. Oil importers like the U.S. and Europe will benefit from lower energy prices while OPEC members, like Saudi Arabia, and other oil producers will lose out. Iran has the fourth-largest oil reserve in the world and the country’s oil revenues could rise $15 billion in the first year.

As much as 42% of Iran’s government revenues come from crude oil. Since sanctions with European countries have been in effect, exports have dropped by almost 50%. Prior to the Iranian Revolution in 1979, U.S. oil companies were major players in Iran, notes Wharton finance professor Bulent Gultekin. “Iranian oil fields are suffering in that they don’t have the technology for drilling in marginal fields,” he says. “American oil companies should have an interest … but it’s not going to be easily resolved. It’ll be an interesting competition to watch” between European and American companies.

It’s not a vast, untapped market. The firms going in, for the most part, are resuming relationships rather than forging new relationships,” says Philip M Nichols an Associate Professor of Legal and Business Ethics.

“The nuclear talks accomplished and resulted with guidance of the Supreme Leader of the revolution, the support of the nation, and companionship of all pillars of the state, is truly one of the golden pages of the history of this country,” Rouhani said. “As of today, our banks can now interact with the banks of the world for financial and monetary purposes,” he said.

Conclusion

Looking forward, Iran will see more multinationals hunting for opportunities. The World Bank estimates foreign direct investment may double to $3 billion a year, which is still below the 2003 peak. Many countries in the EU stand to benefit. Gultekin notes that Iran has a “very sizable economy with an absorption capacity much higher than many. It invariably will be an economy that will attract interest from everywhere. [Other countries] will have the first-mover advantage.”

“Large trade delegations from Europe — Germany, France, Italy — including CEOs and chambers of commerce, are calling on Iranian businessmen and advancing the cause of European businesses,” notes Marvin Zonis, professor emeritus at the University of Chicago’s Booth School of Business.

Lifting of Iran sanctions will help Tehran resume its oil swap transactions with Russia, Turkmenistan, and Kazakhstan. That, in its turn, will enhance Iran’s foreign policy influence in the Caspian region.In the past,Iran had a very large public sector that began a process of shifting ownership to other actors, like semi-public entities such as pension funds, state banks and foundations linked to the Armed Forces and Revolutionary Guard Corps, notes  Kevan Harris, a UCLA sociology professor who studies Iran’s political economy.Harris adds that Americans “will have one less mortal enemy. Hopefully, this will change the dynamics in the Middle East. The U.S. hasn’t had an economic advantage in 35 years. Any trade will be beneficial, but that won’t be the real benefit. The U.S. didn’t do this for economic reasons. The U.S. is doing this for geopolitical reasons.”

The thaw in relations with the West could also help Asian businesses invest more easily in Iran. For countries such as Japan, looking for outward growth, Iran with its cheap but educated labor force could be an ideal place to invest.

China, in particular, stands to advance its rapidly growing interests in Iran, while India and Japan will undoubtedly launch a push to reap their respective benefits.Asian investment in Iran may be further spurred by the nascent battle for influence in the Middle East between Japan, China and India.

It positively appears that in the coming years,Iran may emerge as a geoeconomic power in the region.