Foreign secretary Philip Hammond will travel to Iran "in the coming days" to reopen the embassy. At the same time the Iranian embassy in London will be reopened, the Foreign Office told City A.M.
This is part of easing diplomatic relations between the two countries in the wake of the Iranian nuclear deal that was reached last month. The US, UK, France, China, Russia and Germany – the so-called P5+1 – agreed to lift sanctions against Iran in return for allowing UN nuclear inspectors extensive, but not automatic, access to sites within Iran.
Sanctions were first applied to Iran in 1979, after the storming of the US embassy. Since then, they've been increasingly tightened - most notably, there is a ban on "the import or purchase of crude oil or petroleum products which are located in or which originated in Iran; and the provision of related financial assistance including insurance".
Foreign brands will return to the country and exporters will be able to receive funds in their own Iranian bank accounts, and petro dollars will return.