Tensions in Middle East Will Soar if U.S. Exits Iran Deal

President Donald Trump has given the signatories of the 2015 nuclear deal with Iran until May 12 to fix “the worst deal ever” or he will reinstate crippling sanctions on Iran. Meanwhile, Iran has said that if the U.S. does not ratify the nuclear deal it will ramp up its uranium enrichment program to levels higher than before the 2015 nuclear deal was reached. When the world found out that Iran had a nuclear program back in 2002, the UN, European Union, and several countries, including the U.S., imposed sanctions to prevent it from developing a nuclear weapon. Iran has long maintained its nuclear program was peaceful, but no one has been able to verify this. After years of crippling sanctions, a nuclear deal was struck in 2015 between Iran and six global powers, the U.S., U.K., Russia, France, China, and Germany. The signatories would lift their sanctions if Iran would limit its nuclear energy program. While not perfect, the Iran nuclear deal was heralded as a short-term victory (it only lasts for 15 years) providing a semblance of peace in the Middle East. The deal was spear-headed by then U.S. President Barack Obama. President Trump, who is no fan of the former president, has said the deal was too lenient and that Iran had broken parts of the agreement. To flex his veneer of strength, Trump gave European signatories until May 12 to “fix the terrible flaws” in the nuclear agreement or he will not recertify the deal and will reinstate U.S. sanction on Iran.1 Frederica Mogherini, the European Union’s foreign policy chief, said Iran has not violated the nuclear agreement and that the U.S. cannot unilaterally terminate the Iran nuclear deal.2

Iran to Restart Nuclear Program if Trump Reinstates Sanctions

Trump’s strongarm tactics are not sitting well with Iran. Akbar Salehi, Iran’s nuclear chief said on Iran state TV that he hoped President Trump would not scuttle the multinational nuclear deal. Salehi backed up his words with a warning that Iran is “fully prepared to enrich uranium higher than we used to produce before the deal was reached… I hope Trump comes to his senses and stays in the deal.”3 Iran isn’t bluffing. Foreign Minister Mohammad Javad Zarif added, “Obviously the rest of the world cannot ask us to unilaterally and one-sidedly implement a deal that has already been broken.”4 Meanwhile, the European countries that are part of the Iran nuclear deal, the U.K, France, and Germany, are in favour of the agreement and believe it is the best way of stopping Iran from getting a nuclear weapon. The European signatories could provide Iran with incentives to stay in the nuclear deal. For Europeans, fears that Iran will restart its nuclear program increases the risk of war in the Middle East. Iran is already helping the Syrian military and recently flew one of its drones into Israeli airspace. For its part, Israel has said it will not tolerate Iran expanding its military presence in Syria. President Trump might think walking away from the Iranian nuclear deal will make it look like he’s taking a tough stance on Tehran, but it doesn’t.

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What will happen if Trump kills the Iran nuclear deal? Oil prices would undoubtedly go up, a resumption of U.S. sanctions could derail tens of billions of dollars in corporate deals, and growing conflict in the Middle East could hammer global trade. At Learn-To-Trade.com, our professional traders will teach you how to protect your investing portfolio and profit no matter what happens with incidences like the Iran nuclear deal. Learn-To-Trade.com is Canada’s oldest and leading provider of stock market trading courses and is designed to help investors of every skill level trade more confidently and profit more consistently. Investors who take Learn-To-Trade.com’s stock market trading course will learn how to spot market trends, how to conduct technical and fundamental analysis, learn about commodities, futures, foreign markets, stock index trading, cryptocurrencies, blockchain, and Forex trading. You’ll also learn about risk management and capital preservation. At Learn-To-Trade.com we also understand that investors have different needs, that’s why we provide a unique, Lifetime Membership that allows you to re-attend any part of the program as often as you’d like. To learn more about Learn-To-Trade.com’s stock market trading course, contact us at 416-510-5560 or by e-mail at info@learn-to-trade.com. Sources:
  1. “Iran tells Trump he would regret dropping nuclear deal,” Reuters, April 9, 2018; https://www.reuters.com/article/us-iran-nuclear-rouhani/iran-tells-trump-he-would-regret-dropping-nuclear-deal-idUSKBN1HG0U7.
  2. Herszenhorn, D. and Barigazzi, J., “EU: US has no right to terminate Iran accord,” Politico, October 14, 2017; https://www.politico.eu/article/federica-mogherini-donald-trump-iran-eu-us-has-no-right-to-terminate-iran-accord/.
  3. “Putin, Macron, call for full implementation of JCPOA,” Iran Daily, April 30, 2018; http://www.iran-daily.com/News/214258.html.
  4. “Iran ready to resume nuclear program if US leaves deal,” MEHR News Agency, April 21, 2018; https://en.mehrnews.com/news/133504/Iran-ready-to-resume-nuclear-program-if-US-leaves-deal.
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