A great step for global balance of the oil and gas sector.
Last year, China took a major step to upset the United States in its efforts to isolate Iran economically by committing to several hundred billions of dollars in investment in the Islamic Republic.
China updated a 25-year deal signed with Iran first in 2016 that foresees $400 billion of Chinese investment in the resource-rich Middle Eastern nation.
According to analysts, the deal represents “a potentially material shift to the global balance of the oil and gas sector” and could mark a "seismic shift in the global hydrocarbons sector” where no US dollars will be involved in commodity transaction payments.
The central pillar of the new deal is that China will invest $280 billion, developing Iran's oil, gas and petrochemicals sectors. There will be another $120 billion investment in upgrading Iran's transport and manufacturing infrastructure.
Beijing’s biggest transportation project in Iran is worth $1.5 billion to electrify the rail line from Tehran to Mashhad for a length of 926 kilometers.
There are also plans to establish a Tehran-Qom-Isfahan high-speed train line and to extend this upgraded network up to the northwest through Tabriz.
The railway is part of the 2,300-kilometer New Silk Road that will link Urumqi in China’s resource-rich Xinjiang province to Tehran, connecting Kazakhstan, Kyrgyzstan, Uzbekistan and Turkmenistan along the way and extending to Europe via Turkey.
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