IAEA Confirms Iran Fulfills Nuke-Related Commitments Despite US Exit From Deal

IAEA Confirms Iran Fulfills Nuke-Related Commitments Despite US Exit From Deal

Ignoring pleas by allies, Trump on Tuesday pulled out of an global deal with Iran that was agreed in 2015, a move that raises the risk of conflict in the Middle East and casts uncertainty over oil supplies in an already tight market.

The United States said on Tuesday that it plans to impose new sanctions against Iran after abandoning an agreement reached in late 2015 that curbed Tehran's nuclear activities in exchange for removal of USA and European sanctions.

"There's a broad consensus that [supplies are] going to rebalance and tighten up, but you throw the possibility of disruptions of flows from Iran, and the markets started to worry", he said. He noted tweets from Trump a few weeks ago complaining oil prices were too high, but if Iranian sanctions curtail global supply that will only raise prices.

The Organization of the Petroleum Exporting Countries, however, is in no hurry to decide whether to pump more oil to make up for an expected drop in exports from Iran, four sources familiar with the issue said, saying any loss in supply would take time.

Washington has given European firms doing business in Iran up to six months to wind up investments or risk U.S. sanctions and they are also forbidden from signing any new contracts with Iran.

In addition to the United States, the deal was also agreed to by economic powerhouses China, France, Germany, Russia and the United Kingdom. Melek said if talks break down in the coming weeks and months or there is more aggressive rhetoric, which is entirely possible, prices could potentially spike higher.

Gerald Bailey, president of Petroteq Energy, also expects prices will increase. "We're not talking about big spikes, but there is some uncertainty here".

"Europe and China will not fight against the US sanctions. Europe will not want to upset Iran".

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With Germany, France and Britain saying they are committed to the accord, the European countries will "continue importing oil from Iran, albeit having to side-step the US banking system for trade purposes", it said.

"Higher prices are more than likely to be capped as".

Exxon Mobil rose 2.4 per cent, Chevron gained 1.7 per cent, Royal Dutch Shell closed up 3.38 per cent and BP ended 3.92 per cent higher.

That figure could jump higher depending on where oil prices go.

More oil drilling in the USA would increase production of associated gas, which is rich in ethane and other natural gas liquids (NGLs).

However, bottlenecks in USA pipeline and truck capacity could limit the ability of oil producers to further increase output. It is not unusual for the Trump administration to disregard global accords and disapprove achievements made by Obama. The White House, however, still insists that Iran fulfill all of its obligations under the treaty, even though the USA isn't a party to it, and isn't fulfilling any of its own obligations.

"We have experienced this before, but though we are wiser from the last experience we are really on uncertain ground here", an Indian official said on condition of anonymity, referring to United Nations sanctions reinforced by then U.S. president Barack Obama and European Union curbs that were lifted after the 2015 deal.

Iran said that its uranium enrichment activities are strictly for energy generation.

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