Movers and SHAKERS
Will Iran Continue to Grow Their Nuclear Program?
In 2015, Iran agreed to a long-term nuclear accord with six other world powers, called the Joint Comprehensive Plan of Action. It came after years of tension over Iran’s efforts to develop nuclear weapons, even though they insisted the program was entirely peaceful, the international community was not convinced. The other side of the deal consisted of lifting sanctions that were crippling Iran’s economy. It was set to last 15 years after the “implementation day” which took place January of 2016. In May 2018, President Donald Trump withdrew the United States from the agreement, stating it failed to address Iran’s ballistic missile program. He reimpose sanctions and is now moving to diminish Iran’s oil exports. Resulting from this, Iranian President Hassan Rouhani announced they will no longer adhere to certain limits as they have not seen the deal’s envisioned economic benefits.
Unaffected U.S. Market. The imposed sanctions resulted in the removal of nearly 2.7 million barrels of Iranian oil from global markets, in an attempt to deny Iran, the wealth they need to continue their weapons program. Although this has limited the supply of oil in the United States, they have managed to keep the oil markets fully supplied and are confident in their ability to continue to do so. The Organization of Petroleum Exporting Countries were already cutting oil to reduce global supply, in an attempt to keep steady prices as worldwide demand weakens.
The United States Not Backing Down. About a year ago, President Donald Trump withdrew the United States from the nuclear deal and started to reimpose sanctions on Iranian oil. He contended that the agreement did nothing to deter Iran from obtaining nuclear weapons and he needs the sanctions to be permanent. The President is not backing down and is implementing a strategy of “maximum pressure”. He also wants Iran to abandon its ballistic missile developments and stop supporting militant groups that the United States regards as terrorist organizations.
Future Uncertainties. After the JCPOA took effect, Iran began exporting more than 2.1 billion barrels per day, approaching similar levels from before the sanctions were originally imposed in 2012. Once the waivers were removed, Iran’s oil exports plummeted to three hundred thousand barrels per day or less. Resulting from this drastic loss, they have decided to no longer adhere to all the regulations of the agreement. Iranian President Hassan Rouhani emphasized that they will not be withdrawing from the JCPOA, but rather reducing their compliance. He also stated that they have no interest in waging war, but they will not be giving in to bullying. The remaining five parties have urged Iran to continue with the agreement, while Russian Foreign Minister Sergey Lavrov blamed the United States’ irresponsible behavior for creating this situation. Iran announced that Tehran, their capital, would begin to store more heavy water and low-enriched uranium than the deal currently allows for. These additional materials do not pose an immediate threat, but it cuts down the time needed to produce enough material for a nuclear weapon.
The deal was originally intended to limit Iran’s ability to create a nuclear weapons program. President Trump does not feel that the agreement does enough and has imposed sanctions on their oil until the deal is reformed. In response to this, Iran has decided to not follow all of the existing regulations and is going to start storing more materials. The U.S. is waiting to see what their actions are and is not planning on stepping down.
https://www.reuters.com/article/us-oil-iran-exports-pompeo/u-s-removed-almost-2-7-million-barrels-of-iranian-oil-from-market-pompeo-idUSKCN1VA1HY, Humeyra Pamuk and Doina Chaicu August 20, 2019
https://www.armscontrol.org/act/2019-06/news/iran-threatens-breach-nuclear-deal, Kelsey Davenport, June 2019
https://www.cfr.org/backgrounder/what-status-iran-nuclear-agreement, Zachary Laub July 31, 2019
https://www.investopedia.com/articles/investing/072715/dummies-guide-iran-nuclear-deal.asp, Shobhit Seth June 25, 2019
https://www.nytimes.com/2018/11/05/world/middleeast/iran-sanctions-explained.html Rick Gladstone November 5, 2018