How the withdrawal of US from the Iran Nuclear Deal deal affect the Iran as well as the global market? Discuss.
In 2015, P5+1 and Iran signed the historic Joint Comprehensive Plan of Action which intended to lift economic sanctions on Iran in exchange for limits on the Iranian nuclear program.
As per the accord, in order to restore sanctions, signatories need to offer evidence regarding the violation of explicit terms by Iran. There are apprehensions that the United States may abandon the Iran nuclear deal program and restore the economic sanctions.
Such restoration of sanctions would have a chilling effect not only on Iran but also on the international firms’ who have invested in Iran or who are planning to invest. A pullout by the US could have major market impacts as U.S. sanctions can be applied to investors who are doing business with Iran. Even if European leaders plan to protect their own multinational corporations, it will be very difficult as their businesses will primarily react to market forces and risks.
The renewed sanctions will have ramifications for Iran’s energy sector, this could cut off Iran’s oil supplies, which may potentially boost oil prices in international market.
US withdrawal from deal and sanctions may create further instability in the region. Along with that Snapping back on sanctions may lead to the diplomatic collision between the US and the European Union, Russia and China. In fact, the economic sanctions on Iran will also impact various Indian projects and collaborations with Iran.
The sudden withdrawal of US may lead to uncertainty, therefore if Iran is complying the terms of the deal, the deal should continue.