Financial news

Iran pulls back from nuclear deal as Middle East tensions rise

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Via Financial Times

Iran said on Sunday it would no longer abide by any of its commitments to the 2015 nuclear accord it signed with world powers, signalling the deal’s collapse as the fallout from the US killing of a top Iranian commander intensified.

Iranian state television quoted a government statement as saying that Tehran would not abide by the limitations on the number of centrifuges used for enrichment, its stockpiles of enriched uranium or its nuclear research and development.

The announcement came hours after hundreds of thousands of Iranians gathered in Mashhad, Iran’s holiest city, to mourn Qassem Soleimani, who was killed by US air strikes in Baghdad on Friday.

His assassination dramatically escalated the brewing stand-off between the US and Iran and has heightened tensions across the region. Tehran has vowed to respond.

US president Donald Trump warned over the weekend that the US had identified 52 targets, including cultural sites in the Islamic Republic that he said it would “hit very fast and very hard” if Tehran retaliated over the killing.

Iranians gather around a vehicle carrying the coffins of slain major general Qassem Soleimani and others, as they pay homage in the northeastern city of Mashhad on January 5, 2020. - Iran has cancelled a Tehran ceremony to honour slain general Qasem Soleimani due to an overwhelming turnout by mourners in second city Mashhad, the Revolutionary Guards said. Soleimani, who spearheaded Iran's Middle East operations as commander of the Revolutionary Guards' Quds Force, was killed in a US drone strike Friday near Baghdad airport.The attack was ordered by President Donald Trump, who said the Quds commander had been planning an "imminent" attack on US diplomats and forces in Iraq. (Photo by MEHDI JAHANGHIRI / IRAN'S FARS NEWS AGENCY / AFP) (Photo by MEHDI JAHANGHIRI/IRAN'S FARS NEWS AGENCY/AFP via Getty Images)
The coffins of Soleimani and two others in Mashhad on Sunday © Mehdi Jahanghira/AFP

Mohammad Javad Zarif, Iran’s foreign minister, responded to Mr Trump on Twitter on Sunday, saying a red line had been crossed: “Those masquerading as diplomats and those who shamelessly sat to identify Iranian cultural & civilian targets should not even bother to open a law dictionary. Jus cogens refers to peremptory norms of international law, i.e. international red lines. That is, a big(ly) ‘no no’.”

Later on Sunday Mr Zarif tweeted that, as the final remedial step of the nuclear deal, “there will no longer be any restriction on number of centrifuges”.

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“This step is within JCPOA & all 5 steps are reversible upon EFFECTIVE implementation of reciprocal obligations,” the post read and added, “Iran’s full cooperation w/IAEA will continue.”

The Islamic regime has been steadily increasing its atomic activity since Mr Trump withdrew the US from the accord in 2018 and imposed sanctions on Tehran.

Iran’s announcement on Sunday fell short of a total withdrawal from the accord. It said it would continue its co-operation with IAEA, the nuclear watchdog monitoring the agreement.

But Tehran’s decision to stop abiding by any of the deal’s commitments will increase fears about the risks of a regional arms race and dash any lingering hopes among European powers of keeping the accord alive.

While the European signatories, France, the UK and Germany, share Washington’s concerns about Iran’s support for regional militias and the development of its missile programme, they did not support Mr Trump’s decision to withdraw from the deal or impose crippling sanctions on the republic. The so-called E3 have been battling to keep the deal alive and sought means to counter the US’s sanctions, which has kept open an important diplomatic channel with Tehran.

But Iran’s announcement on Sunday will make it harder for them to continue supporting the accord. Under the deal, Tehran agreed to limit its nuclear activity in return for the economic benefits of many sanctions being lifted. After Mr Trump pursued his “maximum pressure” strategy against the republic, Iran’s oil exports have plummeted from about 2.8m barrels a day in May to less than 500,000bpd.

John Bolton, Mr Trump’s former national security adviser and renowned Iran hawk, greeted the news with gusto. “Another good day,” he tweeted on Sunday. “Iran rips the mask off the idea it ever fully complied with the nuclear deal, or that it made a strategic decision to forswear nuclear weapons.”

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He added that the US should now focus its efforts on “preventing the ayatollahs from getting such a capability.”

The announcement on Iranian TV on Sunday said Iran would return to its commitments if the US lifted its sanctions, reiterating Tehran’s longstanding position.

In a further sign of the repercussions of the killing of Soleimani, Iraqi lawmakers voted on Sunday in support of Baghdad expelling American troops from the country.

The resolution that was voted on is not binding, but underscores the backlash in Iraq triggered by the US strikes that killed Soleimani and a powerful Iraqi militia leader.

“Ending the presence of foreign forces is preferable,” Adel Abdul Mahdi, Iraq’s caretaker prime minister, told parliament on Sunday, “despite the internal and external difficulties that might arise”.

In his speech, Mr Abdul Mahdi also revealed that Iraq had been acting as a mediator to defuse tensions between Tehran and Washington, with Mr Trump asking him to convey messages to Iran. Mr Abdul Mahdi said that Soleimani had been in Baghdad as part of those diplomatic efforts, saying the commander had “a message to me from the Iranian side, in response to the Saudi message that we sent to the Iranians”.

Saudi Arabia is Iran’s main regional rival and a supporter of Mr Trump’s maximum pressure strategy against the Islamic republic. But there have been signs that Riyadh has sought to ease tensions with Tehran in the wake of a missile and drone attack that struck the kingdom’s oil infrastructure in September, temporarily knocking out half of its crude output.

The expulsion of the estimated 5,000 troops in Iraq would be a damaging blow to Washington and severely undermine the international coalition fighting Isis. The coalition on Sunday said it had suspended counterterror operations in order to focus on protecting its own troops.

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“By killing Soleimani, without a thought to the consequences, the US has opened the door to the expulsion of their troops and the ceding of Iraq to even greater Iranian influence,” said Toby Dodge, a Middle East expert at the London School of Economics.

The US and Iran have been the dominant powers in Iraq since the 2003 US-led invasion that toppled Saddam Hussein.

“[W]e want to stay on in Iraq,” a senior state department official told reporters ahead of the vote. “We have an important mission there”.

When asked about the Iraqi parliamentary vote, Mike Pompeo, the US secretary of state, told Fox News that the Trump administration was “confident that the Iraqi people want the United States to continue to be there to fight the counterterror campaign”.

“We’ll have to take a look at what we do when the Iraqi leadership and government makes a decision,” he said.

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