The Iranian government’s nuclear deal leading to a possible lift in trade sanctions against the Arab state will bring benefits to the domestic economy, experts forecast Sunday.

The increase in demand for the construction, steel and automotive industries will bring a breath of fresh air to the sluggish economy, business circle insiders suggested.

Iran is the 26th-largest importer of Korean goods, with about 2,800 Korean companies engaged in Korea-Iran trade. Once the U.S. kicks off its process to lift the sanction around June, more businesses will join the queue, the Korea International Trade Association said in a business report.

“Iran is the third-largest economy in the Middle East, following Saudi Arabia and the United Arab Emirates, and has more than 80 million people. The amount of trade with Iran is still about 1 percent of Korea’s entire trade volume, but it has a huge potential to grow,” wrote Hong Jung-hwa, director of the KITA Institute of International Trade.

The most promising sectors will be steel, construction and automobile. Iranian firms are known to have eyed POSCO’s FINEX steelmaking process and requested for a technology transfer.

“It is true that once the trade borders are more open the chances of us exporting the technology will be higher,” a POSCO official was quoted as saying to a local daily.

Hyundai Motor and Kia Motors, which sold more than 20,000 cars every year in Iran before the export ceased in 2012, are also mulling the possibility of resuming the export. “The number is not significant to the company’s global sales, but due to its geographical importance, having Iran as our export point is quite crucial,” a Hyundai Motor official said in an interview.

As the Iranian government is expected to order $160 billion-worth of construction projects, Korean builders are hoping to capitalize on the opportunity.

Hyundai, GS and several other companies took on billion dollar projects in the South Pars region in Iran in the early 2000s, but have struggled to win orders in the past five to six years.

“Korean companies have a fairly good reputation in the Middle East. If Korean firms can join the construction projects, it will bring vibrancy to the Middle East region struggling with falling oil prices,” said Kim Jong-kuk, official at the International Contractors Association of Korea, to a local newspaper.

Domestic oil refiners have welcomed the deal as a means to diversify its crude oil sources and for a possible price reduction in it. Currently, SK Innovation and Hyundai Oil Bank use Iranian crude oil but more may follow their lead, insiders say.

“But on the other hand, the refined oil price may fall because we have more supply in the market,” an oil company insider suggested.

By Bae Ji-sook (baejisook@heraldcorp.com)