By Elton Gomes
United States President Donald Trump announced his withdrawal from the 2015 Iran nuclear deal on Tuesday. Trump said he will be imposing new sanctions on Iran, potentially disabling the signature agreement negotiated by former President Barack Obama, further adding that countries helping Iran in obtaining nuclear weapons could also face strong sanctions.
Trump’s decision to pull out of the deal is likely to have global repercussions which may include the isolation on the US on the global stage and a furthering of the crisis in the Middle East.
“It is clear to me that we cannot prevent an Iranian nuclear bomb under the decaying and rotten structure of the current agreement,” Trump said in a press briefing from the White House. “The Iran deal is defective at its core. If we do nothing we know exactly what will happen.”
Foreign companies that continue to do business with Iran could face sanctions as Trump signed an executive order reimposing sanctions on such companies. The order gives companies up to 180 days to extract themselves from Iranian contacts or face severe American sanctions.
Although Trump has announced his withdrawal from the nuclear deal, America is in danger of potentially violating the deal. According to the New York Times, Iran, France, Germany and UK have stated that they will remain in the deal, while China and Russia are expected to join Iran in accusing the US of violating the nuclear deal.
Here’s what happened
What is the Iran nuclear deal
On July 14, 2015, Iran, US, China, France, Russia, UK, Germany, and the European Union signed the Joint Comprehensive Plan of Action (JCPOA), commonly known as the Iran deal. Under the JCPOA, Iran consented to eliminate its nuclear stockpile or medium-enriched uranium, reduce its stockpile of low-enriched uranium, and lower the number of its centrifuges. Iran also agreed to convert other nuclear sites into non-nuclear facilities. In return, the US and the EU would lift their sanctions over Iran and Iran would recover assets worth $100 billion frozen in overseas banks.
What does the deal require Iran to do
Iran only agreed to put a stop to building a nuclear weapon, and it received monetary benefits that helped its crippling economy. The deal, however, never mentioned that Iran had to pause other malicious things such as testing missiles, allegedly sponsoring militant groups such as Hezbollah and Hamas, and restricting human rights violations. Given this and other limits on the deal were the reasons why critiques of the deal, Trump included, surmised that Iran could build a nuclear weapon.
Why Trump opposed the deal
Right from the start of his presidential campaign, Trump has vehemently opposed the deal. Trump wishes that the deal’s restrictions – on uranium enrichment and the centrifuges – continue to remain indefinitely. The restrictions will significantly thwart Iran’s reach for nuclear weapons.
Ernest Moniz, a top Iran deal negotiator, said in an interview with Vox,“You could say it’s a terrible deal because it doesn’t cover Hezbollah, and Syria, and Yemen, and missiles, and human rights.” Furthermore, the deal does not stop Iran from testing nuclear missiles.
America and the world face the repercussions
Keeping in mind America’s exit from the Paris Accord Trump’s decision could further diplomatically isolate the US. American companies are likely to suffer as deals involving Iranian companies might be axed. Kabir Taneja, an associate fellow at the Observer Research Foundation said, “Boeing signed a multi-billion dollar deal with Iran Aseman Airlines for new 737 aircraft which will in all probability be nullified now.”
When asked if the decision will lead to further unrest in the Middle East, Taneja said, “If Europe fails to build a consensus with Tehran of staying committed to the deal sans the US, and Tehran returns to enrichment of uranium at industrial levels we can look at a new race to obtain nuclear weapons.”
Taneja added, “Despite Trump saying that the US’ withdrawal is to deter a nuclear arms race in the Middle East, it might only propel what he aims to stop.”
In light of Trump’s meet with North Korean Leader Kim Jong Un, the US president might have hurt his chances towards practising effective diplomacy. Considering Trump’s withdrawal, Kim Jong Un might just be sceptical about negotiating with Trump regarding Pyongyang’s nuclear and missile programmes.
Trump’s sanctions on Iran could also lead to a surge in oil prices around the world. Experts claim that the price of gas could increase upward of 30 cents per gallon. Reuters reported that oil prices increased more than two percent to a three and a half year high following Trump’s withdrawal.
What this means for India
Iran has been a major exporter of oil for India. Sameer Mallya, a geopolitical analyst at Grid 91 said, “Iran is among the top oil exporters, but is not the major source of oil for India. India might decide to not completely cut down on Iranian oil, and any shortfall can be filled in by oil from Saudi.”
In June 2018, India and Pakistan will be formally inducted into the Shangai Cooperation Organisation (SCO), and China is considering inducting Iran as well. “India has maintained good relations with the US and Iran. The US has not been successful in compelling India to sever ties with Iran,” Mallya added. “I don’t think India’s relations with the US will be hampered.”