A reluctant President Trump has decided to issue another waiver of Iran oil sanctions as well as other various sanctions required under the Iran nuclear deal but warned it will be the last waiver unless the agreement is changed to address his concerns.
As we wrote in a client note earlier this week, Trump’s decision will set up a showdown at the next waiver deadline on May 12.
In our view, it is unlikely that Congress or the Europeans will take any meaningful action to modify the agreement. As a result, there is significant risk of snap-back oil sanctions on Iran and the nuclear deal remains on life support.
Trump had been leaning against issuing another waiver but relented after intense lobbying by his national security advisers to give Congress more time to fix what the President views as flaws in the deal.
All of this reminds us of a similar scenario from July 2017 to convince Trump to recertify the Iran deal. A national security meeting turned into an all-day lobbying effort by his advisors with Trump only relenting by requiring a plan to decertify at the next deadline in October.
Trump detests that he has to put his personal stamp of approval on a deal he views as “terrible.” Under US law the President must make a decision to waive Iran sanctions every 120 days in order for the US to keep its commitment under the Iran nuclear deal.
The Treasury Department will also announce additional sanctions on individuals and entities in Iran.