Trump Pulls US Out Of "Unacceptable, Defective" Iran Deal; Obama Slams Decision As "So Misguided"
I am deeply concerned by today’s announcement that the United States will be withdrawing from the Joint Comprehensive Plan of Action (JCPOA) and will begin reinstating US sanctions.
I have consistently reiterated that the JCPOA represents a major achievement in nuclear non-proliferation and diplomacy and has contributed to regional and international peace and security.
It is essential that all concerns regarding the implementation of the Plan be addressed through the mechanisms established in the JCPOA. Issues not directly related to the JCPOA should be addressed without prejudice to preserving the agreement and its accomplishments.
I call on other JCPOA participants to abide fully by their respective commitments under the JCPOA and on all other Member States to support this agreement.
Today is a sad day for America’s global leadership. The Trump Administration’s dangerous & impulsive action is no substitute for real global leadership.
"Iran used economic gains from the lifting of sanctions to continue its activities to destablise the region, particularly by developing ballistic missiles and supporting terrorist groups in the region," according to a statement carried on Saudi-owned Al Arabiya television.
Today President Donald J. Trump announced his decision to cease the United States’ participation in the JCPOA and begin reimposing U.S. nuclear-related sanctions on the Iranian regime. Treasury’s Office of Foreign Assets Control (OFAC) is taking immediate action to implement the President’s decision. Sanctions will be reimposed subject to certain 90 day and 180 day wind-down periods. At the conclusion of the wind-down periods, the applicable sanctions will come back into full effect. This includes actions under both our primary and secondary sanctions authorities. OFAC posted today to its website frequently asked questions (FAQs) that provide guidance on the sanctions that are to be re-imposed and the relevant wind-down periods.
Below is a statement from Secretary of the Treasury Steven T. Mnuchin in response to the President’s decision:
“President Trump has been consistent and clear that this Administration is resolved to addressing the totality of Iran’s destabilizing activities. 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. The United States will cut off the IRGC’s access to capital to fund Iranian malign activity, including its status as the world’s largest state sponsor of terror, its use of ballistic missiles against our allies, its support for the brutal Assad regime in Syria, its human rights violations against its own people, and its abuses of the international financial system.”
Q: Will the United States resume efforts to reduce Iran's crude oil sales?
"From the beginning, the Obama-era Iran Deal was deeply flawed. Iran’s hostile actions since its signing have only reaffirmed that it remains dedicated to sowing instability in the region. The president’s announcement today is a strong statement that we can and must do better. I have always believed the best course of action is to fix the deficiencies in the agreement. It is unfortunate that we could not reach an understanding with our European partners on a way to do that, but I am grateful to them for working with the United States toward that goal. The president is right to insist that we hold Iran accountable both today and for the long-term. There will now be an implementation period for applying sanctions on Iran. During that time, it is my hope that the United States will continue to work with our allies to achieve consensus on addressing a range of destabilizing Iranian behavior—both nuclear and non-nuclear."
One preview of what Trump's speech may look like comes from Citi's head of commodity research, Ed Morse, who in a Bloomberg interview this morning said that President Trump will likely give European governments "a chance to step up what they’ve already offered in terms of tightening sanctions" on Iran.
The tighter sanctions would relate to issues left out of the 2015 nuclear accord, such as Iran’s development of ballistic missiles, terrorist financing, Hezbollah, Islamic Revolutionary Guard Corp.
"The president’s going to say something that he’s going to move in a certain direction, that he’s ready to re-impose sanctions" predicted Morse, who added that Trump will "come out strong, and say the Europeans are stepping up to the table and we’ve got to do more."
Morse also said that it's possible OPEC will meet and decide to increase output to fill gap left by Iran, although with the price of Brent surging to the revised Saudi target of $80, it is unlikely that OPEC will interfere with the recent favorable equilibrium.
Finally, with everyone throwing their 2 cents on what the price impact of today's deal collapse could be, Morse said that the Iranian political risk in oil price is about $5/bbl, however the recently bearish analysts said that any sell-off would be “a lot more” than that.
Iranian president slams Trump's decision to exit nuclear deal