Iran vows to enrich uranium “without restrictions”

Iran's government has announced today that it would no longer abide by any limits on its enrichment of uranium, according to Iranian state TV, raising the risk that Iran will move toward a nuclear weapon and bound to antagonise the US in the latest escalation of tensions between the two nations.

However, Iran has said it will continue to allow inspections by the International Atomic Energy Agency (IAEA) and is prepared to return to compliance with the deal if the US removes sanctions.

Key notes

• European leaders have attempted to mediate in order to keep constraints on Iran's nuclear program intact.
• The Trump administration says its goal is to force Iran to negotiate a more comprehensive deal, though that seems a remote prospect given the current realities.
• Iran announces new step to distance itself from 2015 nuclear deal with major powers.
• Iran says its uranium enrichment work will have no limitations, Tehran will enrich uranium based on its technical needs.
• Iran will continue its cooperation with UN nuclear watchdog.
• Iran's rolling back of its nuclear commitments is reversible if the US lifts sanctions on Tehran.

Market implications

President Trump withdrew the US from the deal in May 2018, setting off a chain of events that have seen tensions rise to the point where the two countries may now be on the brink of war. Following the killing of Qassem Soleimani, head of Iran's elite Quds Force and the promise of retaliation, market participants are bracing themselves for heightened volatility with oil prices likely to go up amid possibilities of a full-blown conflict between two of the biggest oil-producing nations