08 May 2018
President Donald Trump on Tuesday pulled the United States out of an international nuclear deal with Iran, raising the risk of conflict in the Middle East, upsetting European allies and casting uncertainty over global oil supplies.
Trump said in a televised address from the White House that he would reimpose U.S. economic sanctions on Iran to undermine “a horrible one-sided deal that should have never, ever been made.”
The 2015 agreement, worked out by the United States, five other world powers and Iran, lifted sanctions on Iran in exchange for Tehran limiting its nuclear programme. The pact was designed to prevent Iran from obtaining a nuclear bomb.
But Trump complains that the accord, the signature foreign policy achievement of his Democratic predecessor, Barack Obama, does not address Iran’
s ballistic missile programme, its nuclear activities beyond 2025 or its role in conflicts in Yemen and Syria.
Iran has extended its political and military influence in the Middle East in recent years, deeply worrying U.S. allies Israel and Saudi Arabia.
Underscoring the tension in the region, the Israeli military went on high alert on Tuesday for a possible flare-up with neighbouring Syria, which is allied to Iran.
An Israeli air strike targeted a Syrian army position south of Damascus on Tuesday but caused no casualties, a commander in the regional alliance supporting Syrian President Bashar al-Assad told Reuters.
Abandoning the Iran pact was the latest element of Trump’s high-stakes “America First” policy, which has led the United States to announce its withdrawal from the Paris climate accord, come close to a trade war with China and pull out of an Asian-Pacific trade deal.
Iranian President Hassan Rouhani said on Tuesday that Iran would remain in the deal without Washington.
Iranian state television said Trump’s decision to withdraw was “illegal, illegitimate and undermines international agreements.”
Renewing sanctions would make it much harder for Iran to sell its oil abroad or use the international banking system.
Iran is the third-largest member of the Organization of the Petroleum Exporting Countries and pumps about 3.8 million barrels per day of crude, or just under 4 percent of global supply. China, India, Japan and South Korea buy most of its 2.5 million bpd of exports.
According to the U.S. Treasury, sanctions related to Iran’s energy, auto and financial sectors will be reimposed in three and six months.
Oil prices recouped some losses after Trump’s announcement, in a volatile session in which prices slumped as much as 4 percent earlier in the day.
Brent crude futures LCOc1 settled 1.7 percent lower at $74.85 a barrel, while U.S. West Texas Intermediate (WTI) crude futures CLc1 ended the session 2.4 percent lower at $69.06 per barrel.
Wall Street remained in negative territory, while energy stocks cut earlier losses after Trump spoke.
Trump said the nuclear agreement did not prevent Iran from cheating and continuing to pursue nuclear weapons.
“It is clear to me that we cannot prevent an Iranian nuclear bomb under the decaying and rotten structure of the current agreement,” he said. “The Iran deal is defective at its core.”
Iran denies it has tried to build atomic weapons and says its nuclear programme is for peaceful purposes. U.N. inspectors say Iran has not broken the nuclear deal and senior U.S. officials themselves have said several times that Iran is in technical compliance with the pact.
Trump said he was willing to negotiate a new deal with Iran, but Tehran already has ruled that out and threatened unspecified retaliation if Washington pulled out.
– By Steve Holland, Reuters, 8 May 2018
Link to Reuters.
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