A six-month interim agreement to restrain Iran's nuclear programme will enter into force on the 20^th January. The recently announced agreement between the Islamic Republic of Iran and the so-called “P5+1” (the US, UK, France, Russia, China and Germany) provides for gradual easing of certain trade and economic sanctions against Iran in exchange for Tehran’s agreement to suspend certain elements of its nuclear program.

Iran have agreed to dilute or convert into other forms all uranium enriched beyond 5%, not to develop any new uranium enrichment or nuclear processing facilities and that no new centrifuges will be installed or prepared for installation. Iran also allowed the daily monitoring of its enrichment facilities by the International Atomic Energy Agency. In exchange for these concessions Iran will receive relief from some of the imposed sanctions regarding the trade in gold and precious metals, Iran's automotive sector, and its petrochemical exports and a transfer of $4.2 billion in instalments, revenue from sales of its oil that is being held in foreign banks. The first payment of $550 million is expected to be released on Feb. 1, with the remainder distributed evenly over the five and a half months. The core sanctions on Iran's banking, energy, and shipping sectors will stay in place, while some sanctions on imports of car and airplane parts will be lifted.

The world powers welcomed the agreement emphasizing the necessity of continuing negotiations to reach a permanent agreement. Oil companies are watching closely the effects of the temporary easing of sanctions on Iran while a lot of European companies are exploring return back to Iran, mostly energy companies although others such as shipping companies stand to benefit from the loosening of sanctions.

This historic agreement is the first positive step for a permanent agreement to be hammered out with Iran, but Mr. Obama warned that if Iran fails to keep its commitments, “he will turn off the relief and ratchet up the pressure”.