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United States pullout from Iran deal: Who will pay the economic price?

United States pullout from Iran deal: Who will pay the economic price?

The decision to withdraw the United States from the hard-won multinational Joint Comprehensive Plan of Action "sends a critical message", the USA president said on Tuesday.

Mr Trump said the nuclear agreement was a "horrible, one-sided deal" that "didn't bring peace" and "never will".

It is highly likely, Khoman believes, that a special formula used for buying Iranian oil during the time of global sanctions is going to be revived.

"Certain U.S. allies, including Japan and South Korea, may comply with the proposed U.S.re-imposition of Iranian sanctions on the concern of losing the U.S. security umbrella vis-a-vis North Korea", said Khoman. Their goal in 2015 was to recover some of the cash US officials had been holding for years, since the revolutionary Islamic regime took power. "The Treasury Department thanks the UAE for its close collaboration on this matter".

White House national security adviser John Bolton said Sunday that "it's possible" there will be secondary sanctions imposed on European companies as a result of the USA withdrawal from the Iran nuclear deal. Trump added that the United States would institute "the highest level of economic sanctions" on Iran. Iran is still sticking to its nuclear commitments, according to IAEA inspectors.

Sanctions come amid an oil market that has already been tightening due to strong demand, especially in Asia, and as top exporter Saudi Arabia and top producer Russian Federation have led efforts since 2017 to withhold oil supplies to prop up prices.

Certain waivers can be negotiated, but the US did not say what goods or countries might qualify.

Brent Crude
Daily July Brent Crude

President Trump further called the Iran nuclear deal as "defective", adding that Washington would reinstate sanctions against the Islamic republic.

The U.S. will not have the coalition that shut in 1 million barrels per day (mb/d) of Iranian oil exports prior to the 2015 agreement. That figure could jump higher depending on where oil prices go.

Crude oil traded slightly bearish during the Asian session in response to the ruthless rise in USA drilling activity pointed to increased output.

Global benchmark Brent crude stabilized near 3-1/2-year highs on Friday as the prospect of new USA sanctions on Iran tightened the outlook for Middle East supply at a time when global crude production is only just keeping pace with rising demand.

"The prime minister reiterated the government's position on the Iran nuclear deal, noting that we and our European partners remain firmly committed to ensuring the deal is upheld", Downing Street announced in a statement following May's phone conversation with Trump on Friday. There will be a 90-day and 180-day wind down period before sanctions really start to bite, which puts the deadline at early November.

"Immediately there will be no impact but we have to wait and watch how other nations particularly the European block, react", said A K Sharma, Director (Finance) of Indian Oil Corp (IOC), the country's largest oil firm.

While the United States could "totally d***" the Iranians, it would requires over a "couple of million" men, led to unspeakable causalities and require a full-scale invasion of Iran.





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