Following a week during which President Trump met with most of the signatories to the JCPOA, there appears to have been no movement on a concerted approach to Iran that would replace the JCPOA. Moreover, despite somewhat contradictory reporting, the Trump Administration continues to indicate that waivers on sanctions would be limited at best. The loss of Iranian exports continues to look inevitable. This is consistent with the President’s urging of producers to increase output and the discussion of an SPR release.
Over the past week, President Trump has met with all of the key European players in the Iran nuclear agreement (the JCPOA) in a series of meetings. None of those meetings produced any headway in an agreement between the United States and the other signatories to the Iran nuclear agreement on a way ahead now that the U.S. has unilaterally withdrawn and is on a fast road to re-imposing a broad range of sanctions on Iran and on countries and companies who do business with Iran. While President Trump has been on his diplomatic tour of Europe, his administration has been making clear in formal letters to the European Union that he United States will not be granting blanket or other broad-based exceptions to U.S. secondary sanctions for European companies doing business in or with Iran.
In a letter responding to a diplomatic note from the European Union and its key member states, U.S. Secretaries of State and Treasury indicated that only very limited exceptions to sanctions would be provided, and those would be based narrowly on national security or humanitarian grounds. This comes as President Trump, in the final leg of his trip, declared the European Union “a foe” in terms of trade relations with the United States. Iran was mentioned only briefly in the press conference by President’s Trump and Putin, with the Russian president noting Moscow’s concern about the withdrawal of the United States from the JCPOA. Only at the NATO summit was there some semblance of agreement in the form of a single paragraph related to Iran – particularly its missile activities — in a long, agreed diplomatic communiqué.
Even after multilateral meetings at NATO (with the chance for side meetings that often occur at these forums), a bilateral meeting with the UK Prime Minister, and a bilateral meeting with the Russian President, the United States has not convinced any of the other signatories of the JCPOA to abandon it. Despite the lack of any diplomatic agreement, the ongoing threats by the U.S. administration to renew sanctions on companies doing business with Iran may in fact result in a significant lessening of foreign economic interaction with Iran in the coming months. The key countries of Europe, through the European Union, will continue to ask and argue with the United States for waivers or exceptions, but neither diplomatic correspondence nor chances for face-to-face meetings with President Trump seem to be having any impact in this regard. As a result, European companies in oil trade are making plans and taking actions to reduce their exposure to U.S. sanctions, which are slated to be re-imposed starting in November. The overall tone of the dialogue between the United States and Europe was not helped either by President Trump’s statements during his trip, lessening chances for a unified, agreed front on Iran going forward. In the longer term, European governments, the EU, and European companies will likely look for ways to reduce their exposure to U.S. sanctions and pressure on a range of issues.
At NATO, the single paragraph regarding Iran refers primarily to the Alliance’s worries about Tehran’s ballistic missile programs. This makes sense given NATO’s military focus, but no new ground was forged with regard to how to address these concerns. The dual statements by Presidents Trump and Putin at their press conference indicated that each had stated their nation’s (differing) opinions, but there was no indication that any progress was made on reconciling these differences.