About The Deal
Iran nuclear deal (Formerly known as JCPOA) – An agreement between Iran, P5+1
countries (USA, China, Russia, UK plus Germany) and the European Union, in July
2015. In this deal, Iran agrees to reduce uranium enrichment activity
drastically, dispose of its enriched uranium stocks and modify a heavy water
facility so it could not produce material suitable for a nuclear bomb.
Iran Gets Out Of This Deal
sanctions imposed by the United Nations, United State and European Union in an
attempt to force Iran to halt uranium enrichment crippled its economy, costing
the country more than $160bn (£110bn) in oil revenue from 2012 to 2016 alone.
According to the deal, Iran stood to gain access to more than $100bn in assets
frozen overseas, and was able to resume selling oil on international markets
and using the global financial system for trade.
Trump Calls it – “Worst Deal Ever”
are not in compliance with the agreement and they certainly are not in the
spirit of the agreement in compliance,” Trump said
IAEA (International Atomic Energy Agency), which is responsible for keeping a
check on the deal, has always maintained that Iran is complying with all the
clauses set on the limit for its nuclear program.
seems that the real reason for Trump administration going against this deal is
not the nuclear threat but more of a political in nature.
indirectly supporting the ISIS by funding the Shia militias in Iraq who are
fighting against the Sunni minorities.
a militant group in Palestine is also funded and armed by Iran. It also sent
arms and ammunitions to Houthi, yet another militant group in Yemen which was
responsible for the civil war that resulted in dissolution of the government.
security council had strictly warned against testing ballistic missiles, still
Iran went ahead with it. Although, these tests did not violate the Nuclear
It is very much
possible that President Donald Trump would not certify Iran’s
compliance of terms of the Nuclear Agreement this coming month of May ’18 (120
days after the last review in October).
would it mean for the Global Economy
is only one word for it – “Oil”. Iran has 158 bn barrels of crude oil as it has
the fourth largest reserves worldwide. This decertification would drive
away the investors, hence a fall in oil production.
if the old sanctions are to be put up again on Iran, It would mean that Iran
would have to stop selling oil (30 -40 million barrels), which would push up
the oil prices.
Once the oil production starts falling, It would put an upward pressure on the
Global Oil prices, reducing the money that would be spent on other things.
final thought is that Iran trades its oil in Non-US currency, so it would be an
advantage to the US and the US world reserve currency.
on China and India
Iranian oil accounted for nearly 16.5 percent of India’s crude oil imports.
About 40 percent of the refined oil consumed by India is imported from Iran.
which is the fourth largest consumer of oil in the world, is free to import
Iranian oil but will have to pay in Indian Rupees. Importing goods or
sending shipments to Iran will again become expensive because of high shipping
charges. Putting up sanctions will only make things harder for India.
Iran will loose out on options like Russia and China for their infrastructure
development, which will mean that India would have a better chance at uncompetitive
said, India will have an advantage in some sectors and will loose on others,
Like Pharmaceutical and IT sector, which would be reluctant to invest there due
the risks associated with the sanctions.
and Iran share a close economic and trade relationship. One of the main pillars
of this relationship is Oil and Gas. Approximately 10 percent of China’s crude
oil imports are from Iran. China, being a part of P5+1 had pushed the deal for
lifting sanctions on Iran back in 2015.
is not set to affect much even if sanctions are re-imposed on Iran, as during
the last sanctions also china continued to buy Oil and trade other goods with
Iran. Also, China mostly acts independently irrespective of any international
relationship between Iran and neighbouring UAE is mainly that of trade with
Iranian businesses having a huge presence in UAE. If the sanctions are put in
place it would impact more on the side of Iran than UAE, as UAE was