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Three years ago, Iran agreed to inspections and limitations regarding its nuclear program under a pact with the United States, Russia, China, Britain and Germany. These nations in turn agreed to remove restrictions on Iranian oil sales among other economic activities, including foreign investment opportunities. Under the agreement brokered by the Obama Administration, economic sanctions were lifted, and Iran's oil sales and imports of nonagricultural products skyrocketed. ^1 2

As part of that deal, the United States waived certain restrictions allowing American companies to conduct business directly through the Central Bank of Iran.

Today Iran, and countries who do business with the US and Iran, including the signatories of the 2015 Joint Comprehensive Plan of Action, are concerned about the expiration of the waiver this coming weekend. The Washington Post continued:

The price of West Texas Intermediate crude topped $70 a barrel Monday for the first time since 2014 amid fears that renewed U.S. sanctions would require international companies to buy less Iranian oil or face stiff penalties.

According to October, 2017 BBC reporting, The Trump Administration asserts that Iran broke parts of the agreement, including heavy-water limits and access to international inspectors, and called for Congress to renegotiate the deal Mr. Trump considered too lenient. Current reporting from The New York Times characterized those violations as "minor infractions that were quickly rectified." ³

The Times article also stated that senior officials from Britain, France and Germany had all traveled to Washington recently to try to convince the Trump Administration to keep the nuclear deal, though flawed, in place. Particularly President Macron of France and Chancellor Angela Merkel of Germany "suggested the West could impose new sanctions against Iran's ballistic missile development and armed support for the Syrian regime" among others, rather than discard the deal in its entirety. The same reporting cited an unidentified senior European diplomat who told reporters today that it was "pretty obvious" Mr. Trump would not continue to waive the sanctions.

Political commentary suggests that the US is being encouraged by regional allies to abandon the deal with Iran simply because it's a deal with Iran — an accord that could lead to closer ties between Washington and Tehran that the Saudis cannot abide.⁴

Iranian oil exports are estimated to be about 2.6 million barrels per day. Renewed sanctions could cut as much as 20% of those sales within months — sales which account for over 60 percent of Iran's total export revenue. The same reporting from The Washington Post claimed the Trump Administration would begin asking oil traders to cut their consumption of Iranian crude, and could levy penalties on those countries who do not comply.

Comment

The Times article quoted President Macron as saying he believed President Trump would "get rid of this deal on his own, for domestic reasons." I can think of three:

1. Trump First: The 2015 deal was orchestrated by the Obama Administration, and President Trump can't let that stand despite the pleas of our European allies. He is driven to make a deal that's bigger and better and bears the Trump name;
2. America First: reducing the ready global supply of crude oil to make American oil more attractive to the market (partly through coercion);
3. To punish Iran for its role in the Syrian Civil War.

In 2017, US oil exports were almost double what they were in 2016, due to "booming U.S. production, expanding pipeline and export capacity, and the more than $3-a-barrel discount" ⁵. The surge has received the attention of Asian markets previously devoted to OPEC:

U.S. crude oil exports to China accounted for 202,000 bpd—or 20 percent—of the 527,000-bpd total increase in American exports in 2017, EIA data showed. . . . Another large Asian crude oil importer, India, which had not received any U.S. oil in 2016, bought 22,000 bpd in 2017 to tie with Spain as the tenth-largest destination of American crude sales.

It doesn't seem much of a stretch that the Trump Administration would use an available excuse to back the US out of the Joint Comprehensive Plan of Action to further the US' ambitions as a major OPEC competitor. But there's no guarantee the US will be able to strike the bigger, better deal President Trump is after, and certainly the other signatories are concerned about the impact backing out could have on their national interests.

For fairly easily digestible information about the Iran Nuclear Deal, see this simple guide published by The New York Times.