News of an electoral victory into the Iranian presidency of a candidate tagged a moderate cleric, Hassan Rowhani, may hold great implications for a number of critical quarters in South Africa.
Major South African corporations like Sasol and MTN will sure watch developments around Iran with keen interest given their exposure in the oil rich country. Iran focused geopolitical developments of the past few years punched some financial holes in these South African firms.
Rowhani is set to take over as Iran president, from the outgoing fiery radicalMahmoud Ahmadinejad after claiming more than 50% of the votes.
Rowhani’s victory has been widely interpreted as a triumph towards reform and defeat of extremism. The cleric himself spoke of his victory in these terms. He was quoted by AFP saying “This is a victory of intelligence, of moderation, of progress… over extremism”
“A new opportunity has been created by this great epic, and the nations who tout democracy and open dialogue should speak to the Iranian people with respect and recognise the rights of the Islamic republic”.
The ascendance of the former negotiator for Iran in the nuclear impasse comes with hopes that the conflict will be resolved. The impasse caused by allegations that Iran has been enriching uranium in order to build a nuke has been felt across the globe. Sanctions against the oil producing giant have impacted on supply/demand expectations and the price of oil. Iran houses the third largest proven oil reserves.
Iran was one of the largest supplies of imported petroleum to South Africa before the country was pressured to look elsewhere in the past year or so.
A resolution of the conflict could provide some relief on the oil price front but also directly to companies like MTN which holds a second Iranian GSM licence. MTN seems to have shaken off accusations of irregularities by Turkish player, Turkcell, around the Iran operation. But the US led sanctions against Iran which have seen major financial players shun the oil rich country has challenged operators.
Petrochemicals giant Sasol has resolved to exit its Iranian. In its latest trading update, for the nine months ended March, Sasol said its plan to exit its Iranian operation was progressing well, albeit slower than initially anticipated.
The South African giant, Sasol took the decision to dispose Arya Sasol Polymers Company (ASPC) after the operation became too hot a political potato to handle. Sasol ventured into the ASPC in 2003 through a joint venture with Iran’s national petrochemical producer. ASPC produces polymer, largely known as a derivative for a range of plastic products.
It must be stated that the Iranian situation is more complex than promising a simple resolution because of the ascendency of the reformist Rowhani. Observers say the focus must be on Iran’s supreme leader Ayatollah Ali Khamenei. The supreme leader appears to have welcomed Rowhani’s election. He was quoted saying “I urge everyone to help the president-elect and his colleagues in the government, as he is the president of the whole nation”. Khamenei is understood to be the go person when it comes to Iran security matters.
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