Iran deal likely, but the most difficult negotiations ahead

ISTANBUL

Afghan President Hamid Karzai (L) watches as Russian President Vladimir Putin (2nd L) shakes hands with Iranian President Hassan Rouhani (2nd R) before the opening ceremony of the fourth Conference on Interaction and Confidence Building Measures in Asia (CICA) summit at the Expo Center in Shanghai May 21, 2014. REUTERS/Mark Ralston/Pool

As Iran nuclear talks slog forward, an agreement by July 20 is increasingly likely, but the most difficult negotiations remain ahead, the U.K.-based international consulting firm Oxford Analytica has said in a report released this month.

Despite the continuing decline of the Tehran's stock index and the dramatic increases in gasoline and diesel prices, the outlook of both the diplomatic negotiations and the prospects of the Iranian economy are positive, according to the report.

A major IMF report projected that Iran’s economy will stabilise in 2014-15 and credited the Rouhani government with reducing inflation, Oxford Analytica points out, while Iran’s Petroleum Ministry announced that it will use a conference in July to unveil new contract mechanisms to replace the current unattractive buy-back contracts.

Meanwhile, international firms like Boeing and General Electric began cautiously re-entering Iran’s transportation sector. "The Rouhani government is trying to prepare the industry for a gradual reduction in government assistance and increased international competion -- trying to strike a balance between making the industry more competitive while ensuring its long-term survival," the report said.