WASHINGTON/PARIS (Reuters) – U.S. President Donald Trump is expected to announce on Tuesday that he is pulling out of the Iran nuclear deal, European officials said, in a move that would raise the risk of conflict in the Middle East, upset America’s European allies and disrupt global oil supplies.
The New York Times reported that Trump had told French President Emmanuel Macron on Tuesday that he was going to pull out of the international agreement but the French presidency said the U.S. leader gave no indication of a decision on Iran.
In answer to a Reuters question, Macron’s office denied the Times story.
Trump is to make an announcement on the future of the Iran deal at 2 p.m. (1800 GMT) on Tuesday.
One senior European official closely involved in Iran diplomacy told Reuters that U.S. officials had indicated late on Monday that Trump would withdraw from the agreement but it remained unclear on what terms and whether sanctions would be reimposed.
The 2015 deal, the signature foreign policy achievement of Trump’s predecessor Barack Obama, eased sanctions on Iran in exchange for Tehran limiting its nuclear program to prevent it from being able to make an atomic bomb.
Trump has frequently criticized the accord because it does not address Iran’s ballistic missile program, its nuclear activities beyond 2025, nor its role in conflicts in Yemen and Syria.
Iran has ruled out renegotiating the agreement and threatened to retaliate, although it has not said exactly how, if Washington pulled out.
Abandoning the Iran pact would be the most high-stakes move yet in Trump’s “America First” foreign policy, which has seen the United States come close to a trade war with China and announce its withdrawal last year from the Paris climate accord.
Renewing sanctions would make it much harder for Iran to sell its oil abroad or use the international banking system.
Oil prices initially slumped on Tuesday on conflicting headlines about Trump’s intentions about Iran, before rebounding after the New York Times report.
U.S. stocks were volatile but only modestly lower.
“We’re getting conflicting reports about the Iran deal,” said Michael Antonelli, managing director, institutional sales trading at Robert W. Baird in Milwaukee. “The market will struggle until we get clarity on this,” he said.
The Iran deal may remain partially intact, even without the United States. Iranian President Hassan Rouhani suggested on Monday that Iran could remain in the accord with the other signatories that remain committed to it.
“Iran is monitoring U.S. and European stance closely and will react to U.S. decision based on its own national interests,” Iran’s deputy foreign minister, Abbas Araqchi, was quoted as saying by Iranian news agency IRNA.
Trump’s move is a snub to European allies such as France, Britain and Germany, who are also part of the Iran deal and tried hard to convince him to preserve it. The Europeans must now scramble to decide their own course of action with Tehran.
China and Russia are also signatories to the Iran pact.
Iran’s growing military and political power in Yemen, Syria, Lebanon and Iraq worries the United States, Israel and U.S. Arab allies such as Saudi Arabia.
Israel has traded blows with Iranian forces in Syria since February, stirring concern that major escalation could be looming.
Additional reporting by Tim Ahmann, Makini Brice and Arshad Mohammed in Washington, Sybille de La Hamaide, John Irish and Tim Hepher in Paris, Parisa Hafezi in Ankara, Bozorgmehr Sharafedin in London, Andrew Torchia in Dubai; Writing by William Maclean and Alistair Bell; Editing by Peter Graff and Bill Trott