What relief led to Iran receiving billions of

What is the Iran nuclear deal?

July 2015, Britain, China, France, Russia and the United States, Germany agreed
with Iran on a deal to prevent Tehran from building a
nuclear bomb. In exchange, certain international sanctions that have been in
place against Iran for years would be lifted. The sanctions relief led to Iran
receiving billions of dollars in unfrozen funds and opened its markets back up
to many foreign investors.

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The Joint Comprehensive Plan of Action took years
to negotiate and was endorsed by a United Nations Security Council resolution,
solidifying it as international law. It went into effect in January 2016. the
IAEA, are in charge of monitoring Iran’s compliance. The parties also
established a Joint Commission to monitor implementation and handle disputes.
According to this framework, Iran
would redesign, convert, and reduce its nuclear facilities and accept the
Additional Protocol in order to lift all nuclear-related economical sanctions,
freeing up billions of dollars in oil revenue and frozen assets.

 

 

Key Points of the Iran Nuclear Deal

·       Iran will reduce stockpile of low-enriched uranium
by 98 percent to 300 kg for 15 years

·       Iran will reduce by two-thirds the number of
centrifuges operating to enrich uranium at its main processing center

·       Iran is prevented from designing warheads or
conducting experiments on nuclear weapons-related technology.

·       Arms embargo on Iran will be eased, as long as IAEA
judges Iran’s nuclear program to be peaceful.

·       International sanctions on Iran will be lifted, enabling
it to export oil.

·       If an international panel finds Iran is not
honoring the accord, it can vote to restore sanctions.

 

Under the Iran
Nuclear Agreement Review Act of 2015 (INARA), the U.S. president had to certify
to Congress every 90 days that Tehran is abiding by the provisions of the deal.

Four criteria that had to be complied with were:

1. Iran is transparently and verifiably fully implementing
all parts of the deal

2. Iran has not committed a material breach of the
agreement

3. Iran has not taken any action, including covert
activities, that could significantly advance its nuclear weapons program

4. Suspension of Iran-related sanctions are
appropriate and proportionate to measures taken by Iran to terminate its
nuclear program and are vital to U.S. national security interests

After President Trump,
refused to certify Iran’s compliance of terms of the Nuclear Agreement reached
with Iran jointly by Russia, EU and America and re-imposed sanctions on Iran.
The following are the repercussions which affected the whole world.

1)Isolation
of the United States from its allies

First and fore most impact of the decertification came as a hit to the
relationship of USA with its allies. the sanctions imposed on Iran has made
Iran sprinting toward nuclear weapons, and increase the likelihood of military
conflict. Owing to the derailment of trust between various nations the dollar
value was hit and has caused a surge in the oil prices due to its indirect
correlation with the American dollar.

 2) Worries
about North Korea
The decertification and withdrawal derailed diplomatic efforts to get the North
Koreans to come to the negotiating table to give up their nuclear program.
Non attachment of USA to the Iran agreement sent a very problematic signal to
North Korea and shook the very ground to get into a political discussion with a
political solution on North Korean issues.North
Korea and Iran have had a decades-long missile relationship as well as
cooperation on nuclear weapons development. The two countries also likely
closely followed each other’s negotiations to curtail their nuclear ambitions.
Unfortunately, they learned that alternating provocative behaviour and a
perceived willingness to negotiate enabled them to manipulate the international
community into timidity about imposing penalties and acquiescence to repeated
violations. By maintaining strategic ambiguity on their nuclear programs, North
Korea and Iran are gaining international acceptance of activities that were previously
declared “unacceptable.”  By this move of
TRUMP all the efforts closed the doors to have any kind of mutual solution to
North Korean. It has frayed
U.S.-European relations and dash hopes, of a diplomatic resolution to the
standoff over North Korea’s rapidly developing nuclear-weapons arsenal.

3.The impact on companies investing in
Iranian energy

Trump’s
decision adds to political risk of doing business in Iran, which was already
higher than many other resource-rich countries. It could choke off the foreign
investment Iran needs to rehabilitate aging energy assets and boost oil
and gas production. The U.S. has the tools to punish energy companies doing
business with the Islamic Republic, as many have operations in the U.S. and use
dollars to pay for equipment and contractors. Energy companies will probably
have to do “a lot of extra due diligence before committing to any deal. energy
producers, however, the administration’s more confrontational approach does
raise the risk of doing business in the Middle Eastern nation. Companies such
as Total SA, which in July became the first major Western
energy company to sign a production deal with Iran since the 2015 accord,
may face new hurdles in contributing to the country’s estimated $100 billion
need for oil and natural gas investment.

 

4)
Impact of surging oil prices on China

The
demand for oil in China has dramatically increased. China is the second largest
consumer of oil in the world behind the United States. This growing demand in
oil comes in a context of steep international price hikes for oil. With its
increasing oil consumption, China today plays a major role on the international
oil markets, and a change in its consumption has seriously destabilized these
markets. owing to the increase in oil prices to 80$ a barrel, the cost of production has increased since
China is worlds production market. There can be even a possibility that Yuan
value surges and it can present itself as the Gen Next Petro currency. Since
China is the largest exporter of oil in the world. China imports 11 billion
barrels a day and surge in oil prices has caused an increase in cost of import
hence disturbing the balance of trade in China.

5) More conflict in the middle east

Iran’s
gas reserves are the world’s largest and almost four times the size of
U.S. deposits. Iran has raised oil output since sanctions were eased in January
2016, and it’s seeking to boost production capacity.
Trump’s position has curbed the enthusiasm of European and some Asian
corporates for following through with plans to invest in the Iranian upstream
sector. This has forced foreign refineries to source less crude from Iran,
especially the threat of being locked out of U.S. capital markets. This will
bring UAE at advantage position and will increase the cold conflict which has
been prevalent since centuries between the Arab nations.

 

6) Effects on USA

Owing to a surge in oil prices U.S.
gross domestic product will fall costing the economy billions. This is enough
to send the country into recession.
US exports get better and imports get expensive since they pay more dollars
from same products. Cost of living goes up, demand comes down so even
production is reduced, unemployment. Technology will enhance which will lead to
search in alternative of combustion oil and there will be boost in electric
cars.US is a debt economy, because of that people won’t be able to pay off their
loans. SLR reduce to infuse money to banks. Bond prices increase, treasury bill
will become expensive, LIBOR will increase. it is likely to increase 100 base
points, to meet their liquidity requirements. Credit facilities of banks will
be low. Land and real estate prices crash which causes slowing of economy, no
growth of sectors. Overall it will cause depression in US economy. Also, sheil
oil production is high owing to more demand so when, overall the dollar falls
and other currencies rise.

 

7)Effects on India                                                                                                   

India
imports 4 billion barrels a day, India is backward in electronic and automobile
industry so there will be higher govt expenditure in stated sectors. Lower
employment higher crime rates. Rising oil prices
will lead to a deteriorating current account deficit for India. Inflation will
hit the balance of trade in a negative way owing to lower reservesWhat is the Iran nuclear deal?

July 2015, Britain, China, France, Russia and the United States, Germany agreed
with Iran on a deal to prevent Tehran from building a
nuclear bomb. In exchange, certain international sanctions that have been in
place against Iran for years would be lifted. The sanctions relief led to Iran
receiving billions of dollars in unfrozen funds and opened its markets back up
to many foreign investors.

The Joint Comprehensive Plan of Action took years
to negotiate and was endorsed by a United Nations Security Council resolution,
solidifying it as international law. It went into effect in January 2016. the
IAEA, are in charge of monitoring Iran’s compliance. The parties also
established a Joint Commission to monitor implementation and handle disputes.
According to this framework, Iran
would redesign, convert, and reduce its nuclear facilities and accept the
Additional Protocol in order to lift all nuclear-related economical sanctions,
freeing up billions of dollars in oil revenue and frozen assets.

 

 

Key Points of the Iran Nuclear Deal

·       Iran will reduce stockpile of low-enriched uranium
by 98 percent to 300 kg for 15 years

·       Iran will reduce by two-thirds the number of
centrifuges operating to enrich uranium at its main processing center

·       Iran is prevented from designing warheads or
conducting experiments on nuclear weapons-related technology.

·       Arms embargo on Iran will be eased, as long as IAEA
judges Iran’s nuclear program to be peaceful.

·       International sanctions on Iran will be lifted, enabling
it to export oil.

·       If an international panel finds Iran is not
honoring the accord, it can vote to restore sanctions.

 

Under the Iran
Nuclear Agreement Review Act of 2015 (INARA), the U.S. president had to certify
to Congress every 90 days that Tehran is abiding by the provisions of the deal.

Four criteria that had to be complied with were:

1. Iran is transparently and verifiably fully implementing
all parts of the deal

2. Iran has not committed a material breach of the
agreement

3. Iran has not taken any action, including covert
activities, that could significantly advance its nuclear weapons program

4. Suspension of Iran-related sanctions are
appropriate and proportionate to measures taken by Iran to terminate its
nuclear program and are vital to U.S. national security interests

After President Trump,
refused to certify Iran’s compliance of terms of the Nuclear Agreement reached
with Iran jointly by Russia, EU and America and re-imposed sanctions on Iran.
The following are the repercussions which affected the whole world.

1)Isolation
of the United States from its allies

First and fore most impact of the decertification came as a hit to the
relationship of USA with its allies. the sanctions imposed on Iran has made
Iran sprinting toward nuclear weapons, and increase the likelihood of military
conflict. Owing to the derailment of trust between various nations the dollar
value was hit and has caused a surge in the oil prices due to its indirect
correlation with the American dollar.

 2) Worries
about North Korea
The decertification and withdrawal derailed diplomatic efforts to get the North
Koreans to come to the negotiating table to give up their nuclear program.
Non attachment of USA to the Iran agreement sent a very problematic signal to
North Korea and shook the very ground to get into a political discussion with a
political solution on North Korean issues.North
Korea and Iran have had a decades-long missile relationship as well as
cooperation on nuclear weapons development. The two countries also likely
closely followed each other’s negotiations to curtail their nuclear ambitions.
Unfortunately, they learned that alternating provocative behaviour and a
perceived willingness to negotiate enabled them to manipulate the international
community into timidity about imposing penalties and acquiescence to repeated
violations. By maintaining strategic ambiguity on their nuclear programs, North
Korea and Iran are gaining international acceptance of activities that were previously
declared “unacceptable.”  By this move of
TRUMP all the efforts closed the doors to have any kind of mutual solution to
North Korean. It has frayed
U.S.-European relations and dash hopes, of a diplomatic resolution to the
standoff over North Korea’s rapidly developing nuclear-weapons arsenal.

3.The impact on companies investing in
Iranian energy

Trump’s
decision adds to political risk of doing business in Iran, which was already
higher than many other resource-rich countries. It could choke off the foreign
investment Iran needs to rehabilitate aging energy assets and boost oil
and gas production. The U.S. has the tools to punish energy companies doing
business with the Islamic Republic, as many have operations in the U.S. and use
dollars to pay for equipment and contractors. Energy companies will probably
have to do “a lot of extra due diligence before committing to any deal. energy
producers, however, the administration’s more confrontational approach does
raise the risk of doing business in the Middle Eastern nation. Companies such
as Total SA, which in July became the first major Western
energy company to sign a production deal with Iran since the 2015 accord,
may face new hurdles in contributing to the country’s estimated $100 billion
need for oil and natural gas investment.

 

4)
Impact of surging oil prices on China

The
demand for oil in China has dramatically increased. China is the second largest
consumer of oil in the world behind the United States. This growing demand in
oil comes in a context of steep international price hikes for oil. With its
increasing oil consumption, China today plays a major role on the international
oil markets, and a change in its consumption has seriously destabilized these
markets. owing to the increase in oil prices to 80$ a barrel, the cost of production has increased since
China is worlds production market. There can be even a possibility that Yuan
value surges and it can present itself as the Gen Next Petro currency. Since
China is the largest exporter of oil in the world. China imports 11 billion
barrels a day and surge in oil prices has caused an increase in cost of import
hence disturbing the balance of trade in China.

5) More conflict in the middle east

Iran’s
gas reserves are the world’s largest and almost four times the size of
U.S. deposits. Iran has raised oil output since sanctions were eased in January
2016, and it’s seeking to boost production capacity.
Trump’s position has curbed the enthusiasm of European and some Asian
corporates for following through with plans to invest in the Iranian upstream
sector. This has forced foreign refineries to source less crude from Iran,
especially the threat of being locked out of U.S. capital markets. This will
bring UAE at advantage position and will increase the cold conflict which has
been prevalent since centuries between the Arab nations.

 

6) Effects on USA

Owing to a surge in oil prices U.S.
gross domestic product will fall costing the economy billions. This is enough
to send the country into recession.
US exports get better and imports get expensive since they pay more dollars
from same products. Cost of living goes up, demand comes down so even
production is reduced, unemployment. Technology will enhance which will lead to
search in alternative of combustion oil and there will be boost in electric
cars.US is a debt economy, because of that people won’t be able to pay off their
loans. SLR reduce to infuse money to banks. Bond prices increase, treasury bill
will become expensive, LIBOR will increase. it is likely to increase 100 base
points, to meet their liquidity requirements. Credit facilities of banks will
be low. Land and real estate prices crash which causes slowing of economy, no
growth of sectors. Overall it will cause depression in US economy. Also, sheil
oil production is high owing to more demand so when, overall the dollar falls
and other currencies rise.

 

7)Effects on India                                                                                                   

India
imports 4 billion barrels a day, India is backward in electronic and automobile
industry so there will be higher govt expenditure in stated sectors. Lower
employment higher crime rates. Rising oil prices
will lead to a deteriorating current account deficit for India. Inflation will
hit the balance of trade in a negative way owing to lower reserves