JAKARTA (TheInsiderStories) – United State President Donald Trump decision to terminate the participation in the Joint Comprehensive Plan of Action (JCPOA) with Iran and re-imposing sanctions lifted under the deal threatens global community.
This leaves the country with no agreement, and leaves the rest of the world like the United Kingdom, France, Germany, Russia, and China all signed onto the deal.
Furthermore, U.S’s decision also will have a significant impact on Iranian domestic policy cause the country has influence in all the conflict regions in the Middle East, and it could be a beginning of a nuclear arms race again in the region.
Speaking in a televised address to the people on the JCPOA President Hassan Rouhani stressed it that if Iran’s goals are met by other siders, the JCPOA will stand. He said, people must not be worried at all caused according to himn since long ago that Trump cannot be “trusted”.
On Tuesday (08/05), President Trump is terminating U.S participation in the JCPOA, as it failed to protect America’s national security interests. The JCPOA enriched the Iranian regime and enabled its malign behavior, while at best delaying its ability to pursue nuclear weapons and allowing it to preserve nuclear research and development.
The President has directed his Administration to immediately begin the process of re-imposing sanctions related to the JCPOA. The re-imposed sanctions will target critical sectors of Iran’s economy, such as its energy, petrochemical, and financial sectors.
Trump said, U.S withdrawal from the JCPOA will pressure the Iranian regime to alter its course of malign activities and ensure that Iranian bad acts are no longer rewarded. As a result, both Iran and its regional proxies will be put on notice. As importantly, this step will help ensure global funds stop flowing towards illicit terrorist and nuclear activities.
According to him, The JCPOA failed to deal with the threat of Iran’s missile program and did not include a strong enough mechanism for inspections and verification. Instead of using the money from the JCPOA to support the Iranian people at home, the regime has instead funded a military buildup and continues to fund its terrorist proxies, such as Hizballah and Hamas.
Iran violated the laws and regulations of European countries to counterfeit the currency of its neighbor, Yemen, to support the Islamic Revolutionary Guard Corps (IRGC) Quds Force’s destabilizing activities.
The Impact for Global Economy
Followed the decision, Trump administration has gave 90 to 180 days to wind down existing contracts for the companies has receive U.S Treasury licenses to begin conducting business in Iran under strict oversight after sanctions were lifted in the 2015 accord.
Among the companies two aerospace giants Boeing and Airbus, General Electric also its alleys European countries and Japan. As an example, Boeing agreed to sell planes at a price of almost US$20 billion to Iran.
We assume that the regulatory uncertainty could cause some importers of Iranian oil to cut shipments immediately. Iran’s share of global oil output is less than 5 percent and any sizable cut in Iranian oil production could exacerbate what has been a tightening global oil supply.
World crude oil prices traded more expensive on Wednesday morning after Trump resigned from a nuclear deal with allies and Iran. Brent oil futures climbed to $76.21 a barrel, up 1.8 percent from a year earlier while the price of West Texas Intermediate oil futures in the multi-million dollar market rose 1.7 percent to $70.24 per barrel. It was close to the highest level in four years.
Iran is again one of the world’s biggest oil exporters by 2016, the U.S and its allied allies lift economic sanctions in exchange for restrictions on Iran’s nuclear program. With exports reaching 2.6 million barrels per day to Asia and Europe, as of April, Iran became the third oil exporter among the Organization of the Petroleum Exporting Countries (OPEC) after Saudi Arabia and Iraq.
ANZ bank rate, with the new sanction Trump, the market will experience tightening the supply of oil significantly starting the second semester until the end of the year. Tomomichi Akuta, senior economist at Mitsubishi UFJ Research and Consulting in Tokyo added, there were concerns that Iran’s exports would drop by 1 million barrels per day compared to its current position.
“This could lead to a decline in global oil supplies, which could be at least $10 a barrel, with Brent prices close to $90,” he said.
Global oil prices are one of the factors taken into account while formulating the Indonesian Crude Oil Price (ICP). As is known, the assumption of the price of ICP in the State Budget 2018 is set at $48 per barrel.
