'Something will happen' if Iran doesn't negotiate on new nuclear deal

Iran's supreme leader chastised President Donald Trump on Wednesday over his decision to pull America out of the 2015 nuclear deal, while lawmakers lit a paper US flag on fire inside parliament, shouting, "Death to America!" But he warned it's possible Iran could once again start its nuclear program. "If they do, there will be very severe effect". "But we have a very good chance to make a good deal for the world".

The decision will have repercussions in every corner of the globe.

Trump repeated his rhetoric against Iran and the deal, or the Joint Comprehensive Plan of Action (JCPOA), saying it had failed to prevent Iran from developing nuclear weapons or supporting terrorism in the region.

Under the accord negotiated in the Obama era, Iran agreed to restrict nuclear activities and allow worldwide inspectors in return for the lifting of crippling economic sanctions. Many Iranians say they have not seen any benefits from the nuclear deal.

Trump also pointed to Iran's actions in countries including Syria and Yemen. "They've got to understand life because I don't think they do understand life". However, experts fear that in case of failure in reaching any deal, Iran may resume uranium enrichment.

The removal of those sanctions, including on the Iranian oil and banking sectors, had been key to persuading Iran to accept limits on its nuclear programme.

But the leaders of Britain, Germany and France, which were signatories to the deal along with China and Russian Federation, said in a joint statement that Trump's decision was a cause for "regret and concern" and were seeking to salvage the deal.

Major companies in the U.S. and Europe could be hurt, too. "Iran has no obligation to honor its commitments under the current situation", Conservative Parliament Speaker Ali Larijani told lawmakers. Certain exemptions are to be negotiated, but Mnuchin refused to discuss what products might qualify.

Since January 2016, Iran's crude output has risen by around a quarter, or 800,000 bpd, to 3.82 million bpd, making it the sixth largest oil producer in the world.

"Such elevated oil geopolitical risks exacerbate the upside risks to Brent forecasts and reinforce our view that oil price volatility will continue to increase", the investment bank's analysts wrote.

President Trump in April said Iran would pay a "price" if it threatens the U.S.

"We urge the USA to ensure that the structures of the Joint Comprehensive Plan of Action (JCPOA) can remain intact and to avoid taking action which obstructs its full implementation by all other parties to the deal", they said in a joint statement.

The US will impose "the highest level" of economic sanctions on Tehran, he said. What guarantee do the Iranians have that this time, the United States will be a reliable negotiating partner?

Analysts' estimates of the possible reduction in Iranian crude supplies as a result of any new USA sanctions range from as little as 200,000 bpd to as much as 1 million bpd, with most impact from 2019 as sanctions take time to be imposed.

Iran hopes the European Union will pass laws to protect European firms from any potential US sanctions.

  • Leroy Wright