Global Markets: Oil soars after Trump dumps Iran nuclear deal, stocks gain

Thursday, 10 May, 2018

"I am announcing today that the United States will withdraw from the Iran nuclear deal", Trump stated at the White House on Tuesday.

The six major powers involved in these negotiations with Iran were known as the P5+1, which stands for the United Nations security council's five permanent members (the US, France, the UK, China, and Russia) and Germany.

Trump announced Tuesday the USA would pull out of the landmark nuclear accord with Iran, dealing a profound blow to allies and deepening the president's isolation on the world stage. "By walking away from this agreement, we are forsaking the opportunity to continue to monitor in detail the work done by Iran to make certain that they live up to its terms". And then there are the substantial business and infrastructure deals European firms have made in Iran over the past two years: Those firms could lose access to the us market and to USA financial institutions if they continue to do business there. Given all the "what if's" in the media leading up to Wednesday's announcement, of course, there are a few things we think we know. "In just a short period of time, the world's leading state sponsor of terror will be on the cusp of acquiring the world's most risky weapons", Trump said in a televised address from the White House.

Mrs May spoke by telephone with France's President Emmanuel Macron and German Chancellor Angela Merkel after Trump made his statement and the United States said it meant to reimpose sanctions on Iran.

Trump's decision means Iran's government must now decide whether to follow the US and withdraw or try to salvage what's left of the deal. "The politburo calls on the Modi government to disapprove of the U.S. action". French President Emmanuel Macron tweeted that "the nuclear non-proliferation regime is at stake".

Meanwhile, the newly appointed USA ambassador to Germany, Richard Grenell, advised German companies doing business with Iran to "wind down operations immediately" in a post on Twitter.

In their joint statement, Macron, May and Merkel restated their commitment to the Iran nuclear deal and emphasised its importance for worldwide security. Since the deal went into effect, Iranian oil exports have risen to more than 2.5 million barrels per day of crude and distillates. Companies and banks doing business with Iran will have to scramble to extricate themselves or run afoul of the U.S. government. But others are anxious that the U.S.is now in the position of reneging on an worldwide commitment and without a backup plan. Just a handful of the highest-profile European companies with plans to expand in Iran also employ tens of thousands of Americans in their U.S. operations.

"From the moment that President Trump's administration took office, we made the case for keeping the JCPOA at every level", he said.

Donald Trump's scrapping of the Iran nuclear deal will likely, in the words of the New York Times editorial board, "allow Iran to resume a robust nuclear program, sour relations with close European allies, erode America's credibility, lay conditions for a possible wider war in the Middle East and make it harder to reach a sound agreement with North Korea on its nuclear weapons program". Trump's decision could also give hardliners who opposed the deal an edge over Rouhani. The Farzad field was discovered by the Oil and Natural Gas Corporation but the award of its development rights has been delayed for years, first due to sanctions and then due to the differences on rate of return on investment between Indian and Iranian sides.