The impact of the United States’ decision to exit the Iran Nuclear Deal has been immediate on business across the world as crude oil jumped by 3% to hit $77 per barrel, the first time since 2014.
President Donald Trump aggressive rhetorics jolted the market. Many European companies will be very disappointed by Trump’s decision, having signed some large deals with Tehran since sanctions were lifted under Barack Obama. Energy giants like Total and Royal Dutch Shell have lucrative agreements to work with Iran, while Renault has a joint venture to make 150,000 cars a year, and Franco-German planemaker Airbus has reportedly delivered just three out of 100 jets promised to Iran, in a deal worth billions of dollars.
Shares in French carmakers Renault and Peugeot have fallen by over 1.2% this morning. They’ve both built links with Iran to build and sell cars, so now face being locked out again. Like Airbus, Boeing, the world’s largest aerospace company has an agreement with worth $20 billion with Iranian airlines. US treasury secretary Steven Mnuchin warned that Boeing and Airbus’s licences to trade with Iran “will be revoked.”
Carl Bildt, former prime minister of Sweden, says European companies will suffer more from Trump’s actions than US ones. Trump’s decision will also hit China, India and South Korea who are the biggest importer of oil from Iran.
With the withdrawal of US from the Joint Comprehensive Plan of Action ie the Iran Nuclear Deal and subsequent resumption of sanctions on Iran, any organization conducting business with Iranian individuals, companies or related entities could actually find themselves subject to sanctions by the United States.
Any European companies with a US arm that agreed to deal with Iran would now be violating US law, according to experts. Those not active in the US could be hit with a “with-us-or-against-us sanction,” in which Washington would tell the company that if it wants to keep trading with Iran they can’t trade with America.
