Ashton Zarif Iran talks
European Union foreign policy chief Catherine Ashton (L) and Iranian Foreign Minister Mohammad Javad Zarif wait for the start of talks in Vienna(Reuters)

As Iran sat down with global powers to discuss its nuclear programme, the faint whiff of reconciliation lingered in the air of the Austrian capital.

Caution was the key word in Vienna on Wednesday, when foreign ministers briefed the world's press prior to the talks.

All parties stressed that this Vienna summit marks the toughest phase of the negotiations, which began in January this year and are set to conclude in July.

Earlier talks have been marked as the parties outlined their desired final positions, while the gritty details were left untouched. That's why the P5+1, consisting of the US, UK, China, Russia, France and Germany have stressed that a final deal remains a distant prospect until the details can be discussed.

However, with Iran being led by a moderate president and global powers creating a diplomatic space for negotiations, the prospect of rapprochement seems closer than it has for years.

After years of crippling economic sanctions, Tehran's economy is in dire need of access to international markets. Foreign companies are eyeing the prospect of access to a new market. If a deal is reached that leads to a lifting of sanctions, there are sure to be losers and winners.

When Western companies flocked out of Iran amid increasing alarm over the country's nuclear ambitions and tough American-led sanctions on Tehran, Chinese companies stepped in to fill the space.

Oil companies were at the forefront of the new investment opportunity, as Chinese firms profited where others dared not, for fear of angering Washington. While the past years have been kind to Chinese companies, Iranian firms have reported issues with the quality of Chinese products that could see them ditching China for European or Japanese companies.

Falcon Procurement's Arash Heiratangiz told Agence France Presse last week that China could well lose out if sanctions were lifted on a permanent basis.

"With quality an issue, we expect the market to switch back towards them, rather than us keeping the Chinese," he said.

"The Japanese and Europeans can come back if the sanctions are lifted," he added.

While private companies have registered frustration with the quality of Chinese products, central government appears to be losing patience too.

Oil Minister Bijan Zanganeh cancelled a $2.5bn contract with China National Petroleum Corp at the start of the month, adding the company failed to carry out its contractual obligations.

The move has been interpreted as an invitation to other international firms.

If sanctions are lifted and the Chinese lose out there will be no shortage of firms from the United States, Europe and Russia queuing to step in.

For all the adversarial recent history and bellicose rhetoric that has accompanied, Iranian presidents from Rafsanjani to Ahmadinejad have sought stronger ties with the West.

Iran's last president called for stronger ties with the United States in 2009, although with the proviso that the country's nuclear ambitions were not up for discussion.

Rouhani is under pressure from conservative hardliners to be tough with the US but he gave a conciliatory speech at the World Economic Forum this year, urging the old adversaries to end three years of hostility and inviting global companies to "seize opportunities" in Iran.

Other ministers in Rouhani's administration have made eyes at the West, touting the country as a reliable gas and oil supplier at a time when relations with Russia have deteriorated.

Moscow currently supplies around a third of Europe's gas needs but Russian President Vladimir Putin has warned European leaders that supplies could be affected by the price dispute between Russia and Ukraine.

Iran could certainly benefit from American expertise in the energy sector, but analysts think it is unlikely that Tehran would seek to trump a longstanding ally like Russia.

Moscow has partnered with Iran on nuclear technology in the past and has been contracted to build two more nuclear power plants in the country. Russia has also helped keep Iran's military technology and arms supply up to date while the country while the country has been under sanctions.

If all sided can reach an agreement and sanctions are lifted, the prospects of Iran looking West are strong, although this would not be done to spite Russia. However, as all parties are eager to stress, that moment is still a long way off.