Iranian President Hassan Rouhani is expected to announce Wednesday that Tehran may withdraw in whole or in part from the 2015 nuclear deal, potentially by resuming production of high-grade centrifuges for nuclear fuel and limiting inspections of nuclear facilities.
Why it matters: If Iran were to withdraw even partially from the deal, it could see its economy plummet further while military tensions with the U.S. ratchet up. Its internal power balance could also tilt more toward hardliners, who oppose any policies seen as accommodating the West.
Background: Since the U.S. withdrawal from the deal, Iran has counted on European states to pressure the private sector, especially oil companies, to find ways to circumvent U.S. sanctions and continue doing business in Iran.
- But few large firms have been willing to risk violating U.S. law and being banned from the international banking system. As a result, Iran’s economy has taken a hit, with cash reserves depleting as oil exports fall 70%.