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Jonathan Ernst | Reuters
President Donald Trump announces his intention to withdraw from the JCPOA Iran nuclear agreement during a statement in the Diplomatic Room at the White House in Washington, U.S., May 8, 2018.
Leaving the deal could also have ripple effects on the oil market, given Iran’s role as OPEC’s third-largest oil producer. Though Brent crude has posted a sharp rally in recent days on speculation of a withdrawal and tighter supply, the severity of any sanctions could affect how much crude fluctuates in the coming weeks.
Oil prices held lower Tuesday following Trump’s announcement, with West texas Intermediate crude settling down $1.67, or 2.4 percent, just above $69; Brent crude slipped 47 cents, or 0.6 percent, to $75.71.
Possibly calming fears, the Treasury Department clarified that the forthcoming sanctions will be reimposed subject to certain 90-day and 180-day wind-down periods.
“President Trump has been consistent and clear that this Administration is resolved to addressing the totality of Iran’s destabilizing activities,” said Treasury Secretary Steven Mnuchin.
“We will continue to work with our allies to build an agreement that is truly in the best interest of our long-term national security.”
Finally, a U.S. exit could leave the future of Iran’s nuclear program in limbo. By refusing to waive sanctions without proving that Iran is violating the deal, Trump would effectively drop the agreement made by the United States.
Iran had explored aspects of a nuclear program, including enriching uranium, gathering plutonium and researching methods of bomb-making before the 2015 agreement. Though Tehran contends that its nuclear program was always designed for peaceful purposes, its building of a plutonium reactor in northwestern Iran also drew red flags.
In spite of the U.S. incumbent’s threats to withdraw, Iranian President Hassan Rouhani stated that his nation had a plan to counter any move made by Trump when it comes to the deal, Reuters reported. Ahead of the decision, Rouhani said Tuesday that Iran would continue to seek “constructive relations with the world,” despite potential sanctions.
