The Catch-22 Of The US Withdrawing From The Iran Nuclear Deal
In an attempt to undo all things President Obama, President Donald Trump pulled the United States from the JCPOA or The Joint Comprehensive Plan of Action, popularly known as the Iran Nuclear Deal. It’s been more than a year since then and Iran is now lifting its cap on uranium enrichment. Tehran is adamant while saying that if the world powers don’t uphold their promises, why should they?
Iranian President Hassan Rouhani has issued multiple statements stating how Tehran will exceed their uranium enrichment limits. Tehran expects the existing signatories of JCPOA (the United Kingdom, France, Germany, China and Russia) to protect Iran against Oil sanctions imposed by the United States.
What Is The JCPOA?
This historic nuclear deal is an international agreement that intends to keep Iran’s nuclear proliferation at bay by providing them international sanctions relief. Signed on July 14, 2015, six countries (China, France, Russia, the UK, the United States and Germany) and the European Union simultaneously lifted trade sanctions on Iran to turn it into a global economy.
One of the biggest contributors of the conflict in the Middle East is the Saudi Arabian-Iranian proxy war which could have escalated to nuclear war. Therefore, signing the JCPOA was a win-win, that Iran agreed to limit its nuclear capability.
This agreement is controversial because it’s not permanent. According to the JCPOA, the restrictions would only last for a few years. Centrifugal restrictions are to be lifted after the eighth year. Uranium enrichment and stockpile size limits are to expire after the fifteenth year.
It is highly possible that Iran would revert to its old ways in ten years, but ten is greater than zero.
How Impactful Was The Original JCPOA?
Uranium centrifuges are used to enrich uranium. Enriched uranium is the fuel used in arming nuclear weapons. In fact, they were a mere three months away from making a nuclear bomb. Before 14th July 2015, Iran had 20,000+ uninspected centrifuges; afterwards, they only had 6,104 older-centrifuges at two heavily inspected sites. These inspections are regularly conducted by the International Atomic Energy Agency (IAEA) to ensure neutrality as well as compliance.
Prior Arak heavy-water reactors used in reprocessing and producing weapons-grade plutonium were converted to industrial nuclear research centers.
The Fordow site, where Iran enriched Uranium, is now an isotopic research center.
This agreement has limited Iran’s enrichment capacity and level, thereby reducing the stockpile to limited durations. Originally what would have taken Iran a month to enrich a weapon would now take over a year. Tempers tend to cool down in a year as compared to a month.
Iran in return got rights to conduct free trade with anyone. Human rights activists widely criticize the import and export of conventional arms and ballistic missiles into and from Iran miring the JCPOA in controversy.
What Is The Trump Administration’s Stance On The JCPOA?
President Trump claims that Iran has been violating uranium enrichment compliances. He also complained about Iran’s hostile attitude towards American interests in the Middle East.
In October 2017, President Trump stated, “the Iranian regime supports terrorism and exports violence, bloodshed and chaos across the Middle East,” ending with a note of finality by saying, “that is why we must put an end to Iran’s continued aggression and nuclear ambitions. They have not lived up to the spirit of their agreement.”
The Trump Administration also has an issue with the non-permanent nature of this deal. In compliance with his presidential promises, Donald Trump wants a no-deal or a new-deal with Iran.
The Trump Administration has outlined their new demands, including intrusive inspections on Iran’s ballistic missile program. Iran vehemently opposes such proposals.
What Are The Effects Of The US Pulling Out Of The Iran Deal?
The first thing that already happened was the reimposition of sanctions on Iran. On account of the global clout held by the United States, many of Iran’s trading partners were forced to stop trading with them. These sanctions were applied over two “wind-down” periods.
The first wind-down period imposed strict sanctions on the purchase of Iran’s sovereign debt, Iranian purchase of commercial aircraft and services, export of carpets and food, and trade in gold and precious metals.
The second wind-down period imposed strict sanctions on industries such as shipping, oil, petrochemicals, and the energy sector. The US also actively reduced Iran’s sale of crude oil.
The remaining JCPOA countries namely Iran, China, France, Russia, the UK and Germany are still in compliance with the agreement. This is what has kept the full effects of the American sanctions at bay. Consequently, Iran is threatening to pull out of the agreement, meaning that the American sanctions would become very relevant soon.
The IAEA recently noted that Iran has restarted uranium enrichment kickstarting their nuclear program. This factor is currently isolating Iran from the European Union.
After Saudi Arabia and Iraq, Iran is the largest crude-oil exporter in the world within the OPEC. The round of sanctions that came around in 2015 lead to Iranian oil supply falling by one million barrels per day. Once the sanctions were lifted, their supply increased to 3.81 million barrels per day. That was almost four percent of global output in 2018.
Another significant impact of the US pulling out of the JCPOA was that crude prices rose. According to Reuters, Brent crude-oil prices reached $77.20 per barrel. As the likes of China, India and other Asian countries import a lot of Iranian oil for their refineries, oil prices and Crude Futures prices soared astronomically.
To conclude,
The tense situation in Iran is real. The United States has been imposing their clout and Iran is now feeling the heat of the sanctions. Making matters worse, American and Iranian forces are standing off against each other via drone strikes and twitter rants. Only time will truly show the extent of the damage caused by the US pulling out of the JCPOA.
