Dubai: Trade with Iran, once valued at $12 billion (Dh44 billion) annually, will return to pre-sanction levels if P5+1 negotiations continue to progress, the UAE Minister of Economy said on Thursday.

The P5+1 is a group of world powers, United States, Russia, China, United Kingdom, and France, plus Germany, holding discussions with Iran on its nuclear programme.

Speaking to the media in Dubai on the sidelines of the General Civil Aviation Authority (GCAA) 2014 – 2016 Strategic Plan launch, Sultan Bin Saeed Al Mansouri said the UAE was poised to benefit from the lifting of sanctions against Iran.

“If the issues are resolved, I am sure the first country that will benefit out of that is the UAE,” Al Mansouri said.

International sanctions has hit trade between the two countries, which reportedly fell a third from Dh36 billion in 2011 to Dh25 billion 2012. But ongoing P5+1 discussions have led to the distinct possibility of the Iranian economy opening up.

But with a population of 75 million, Iran will need significant investments after nearly three decades of sanctions imposed by the United States and the international community.

Al Mansouri said there is huge potential for the UAE to work with Iran across the board, pointing out that it could lend its expertise in oil & gas, tourism, industry, and logistics & transportation.

“It could go from renewable energy projects, maybe manufacturing of parts and equipment, going all the way to food processing industries because Iran has a sizeable ability to produce agricultural products,” he said.

Oil and gas

Iran has significant oil and gas reserves that could possibly contribute to a global over supply as United States also steps up its domestic oil and gas production. But Al Mansouri said he does not expect oil prices to fluctuate in 2014.

“[Iran’s] market has already stabilised and [will be remain stable] because the demand of the world is increasing,” he said.

Iran already exports oil to Turkey, India and South Korea among other countries.

One of the biggest challenges in trading with Iran is completing transactions. Swift, a leading provider in international fund transfers, currently blocks Iranian banks from using its services.

Asked if the UAE would have transactions for Iran through its own banks if sanctions are lifted, Al Mansouri said it was a decision for the P5+1 negotiations.

“We as the UAE abide by these laws and regulations. Once that is decided of course it will become part of the whole international system,” he said.