Iranian President Hassan Rouhani
Iranian President Hassan Rouhani | Commons
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Iran may increase its uranium enrichment

Iran’s President Hassan Rouhani has announced the partial withdrawal of Iran from the 2015 nuclear deal with P5 + 1 countries.

Rouhani, in a live televised address, announced the step-by-step process Iran would follow.

Over the next two months, Iran would start retaining the excessive “enriched uranium” and “heavy water” produced in the country. Until now, it was selling the heavy water produced in the uranium enrichment process and exchanging its enriched uranium for mined uranium yellow cakes.

Rouhani said during these two months if the US, UK, China, Russia, France and Germany can find a mechanism for Iran to resume banking transactions and sell its oil, then Iran would resume complying with the commitments.

If these countries would fail to meet Iran’s demands, Rouhani said, Iran would start stockpiling uranium without observing any limits.

Though Rouhani made it a point to highlight that Iran was not unilaterally withdrawing from the deal, he said his country was just adopting measures as outlined in the dispute resolution mechanism of the 2015 deal.

“We do not want to leave the agreement. All the people of the world should know that today is not the end of the JCPOA [the deal]; it is a new step within the framework of the JCPOA,” said Rouhani.

Why is Iran withdrawing from the deal?

Ever since American President Donald Trump assumed power in 2016, the relations have been extremely tensed between the two countries.

Trump wants to renegotiate the 2015 nuclear deal and widen its scope. Trump demands that a new deal be negotiated, which includes a ban on Iran’s ballistic missile program and its use of proxy wars across the Middle East.

A year ago, the US unilaterally withdrew from the deal. Last month, the US designated Iran’s elite Islamic Revolution Guard corps as a terrorist group. It also ended the sanction waivers given to Iran’s five largest oil buyers.

Recently, US national Security Advisor John Bolton announced the US was moving an aircraft carrier and B-52 bombers in the Middle East to warn Iran.

According to a report by CNN, the chief reason for this escalatory move was that American intelligence agencies suspected that Iran was moving “short-range ballistic missiles aboard boats in the Persian Gulf”.

The effect on Iran’s economy

After the US withdrew from the 2015 Iran nuclear deal and re-imposed the sanctions, the Iranian economy has come under severe pressure.

The country’s currency has depreciated to record lows, the inflation rate has quadrupled, and most foreign investments have dried out.

Oil is the predominant driver of the country’s economy, and American sanctions have had a strong negative effect on Iran’s oil exports.

Regardless of such crippling economic circumstances, Iran continued to comply with the 2015 nuclear deal. But, the recent military threats by the US seem to have sufficiently provoked Iran’s leadership into action.

What does it mean for the region and world?

In case P5 + 1 fails to meet Iran’s demands, it is quite likely that Iran would resume its nuclear program. With North Korea already a de facto nuclear power, the future might see another one join the nuclear club. This would have grave ramifications for the existing global nuclear order.

In the Middle East, a reordering of alliance system is underway. With more and more cooperation between Israel and Gulf Cooperation Council countries, the region seems to be ending its traditional multipolar structure, and moving towards a bipolar one.

The Gulf monarchies and Israel backed by the US are on one side, while Iran and its Shia allies backed by powers like Turkey and Russia on the other side.

The Iran nuclear deal was seen as the greatest legacy of the former American president Barack Obama. The future of that legacy looks increasingly uncertain.

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