The markets in India, and in other parts of the world, are likely to react adversely on US President Donald Trump's announcement on Tuesday of withdrawing from the Iran nuclear deal, raising the spectre of reimposing of sanctions.
The US president has been rooting against Iran's nuclear enrichment since the days of his campaigning for presidential elections that took place in November 2016.It was widely anticipated that the US president would withdraw from the nuclear accord on Tuesday.
The move, as expected, would have major global ramifications with the oil prices expected to move upward (though the prices fell on Tuesday in run up to the announcement).
The European allies of America would not like to multi-lateral agreement and, would send the global markets into a tailspin.
America's European allies France, Britain and Germany are also part of the deal, and the Donald Trump's decision would send these nations in a state of uncertainty in the growing era of protectionism and America's anti-globalisation stance.The 2015 accord was a signature policy of Donald Trump's predecessor Barack Obama.The significance of this accord lay in the fact that the US had eased sanctions on Iran in exchange for the middle east nation restricting its nuclear enrichment, at least to a level that it doesn't go on to make a nuclear bomb.Trump's rationale for condemning the acccord is that it doesn't cover the ballistic programme of Iran, its nuclear activities beyond 2025 and its role in conflicts in Yemen and Seria.Iran is an oil producer and a member of the OPEC (Organisation of Petroleum Exporting Countries).
And if Trump decides to re-impose sanctions, then it would get harder for the nation to sell its oil abroad.
This, in all probability, might send the global oil prices in either direction.
Trump has time till May 12 to decide if the nation would re-impose the sanctions.On Tuesday, however, the crude oil prices dived as much as 4% ahead of the announcement.
After Trump announced the pullout from Iran nuclear deal, however, New York crude oil price descent accelerated, reported Reuters.Last year, Donald Trump had abandoned the Paris climate deal also, another step in staying true to his campaign of America First.
(With Reuters inputs)