Donald Trump will soon announce whether the US will maintain, modify, or scrap the nuclear deal with Iran. The agreement, which eased decades of sanctions on Iran’s oil-exporting economy in exchange for curbs on the country’s nuclear program, was called the “worst deal ever” by the US president. Despite pleas from European allies to keep to the accord, it looks unlikely that Trump will stick with the status quo.
Amid plenty of volatility, anticipation that the Iran deal is toast is one of the key reasons oil prices have hit their highest levels since late 2014. If Trump reimposes some form of sanctions on Iran, OPEC’s third-largest member could cut oil production, restricting supply.
Even as oil prices dipped a bit today on rumors that a full US withdrawal from the deal is unlikely, “hardly any market participants want to bet on a sensible decision on the part of the US President,” as analysts at Commerzbank put it.
The winning bet this year has been to assume some sort of disruption to the market that pushes prices higher. WTI, the US benchmark for crude, has climbed 14% since the start of the year (at the time of writing). Meanwhile the US dollar, gold, and the S&P 500 are hovering around where they started the year, and 2017’s star, bitcoin, has plummeted by nearly 40%.
Trump will be make his announcement about the Iran deal from the White House at 2pm local time.