Trump to announce decision on Iran deal tomorrow

US president Donald Trump says he will announce his decision on the future of the Iran nuclear deal tomorrow, just as US allies in Europe made final pitches to save the deal.

At stake is a possible reinstatement of US sanctions penalizing foreign buyers of Iranian crude and products. Trump has vowed to pull the US out of the agreement unless European powers can convince Tehran to revise it by 12 May.

"I will be announcing my decision on the Iran Deal tomorrow from the White House at 2:00pm" ET, Trump wrote on Twitter today.

UK foreign minister Boris Johnson visited Washington today to urge the US to remain part of the Joint Comprehensive Plan of Action (JCPOA) — the agreement that in January 2016 lifted restrictions on Iran's crude exports in exchange for concessions on its nuclear program. The agreement is not perfect but it successfully has contained Iran's nuclear program, Johnson said.

The high stakes diplomacy that Trump's ultimatum has sparked is coming to an end. Washington wants to extend restrictions on Iran's nuclear program beyond the 10-year limit set in the JCPOA, impose restrictions on ballistic missiles and implement a stronger inspections regime.

French president Emmanuel Macron, backed by German chancellor Angela Merkel and UK prime minister Theresa May, urged the US to remain a part of the JCPOA while it joins its European partners and others in negotiating a new agreement with Iran to address long-term concerns.

Iran rejected Macron's compromise, calling it appeasement. "The response from some Europeans has been to offer the United States more concessions from our pocket," Iran's foreign minister Mohammad Javad Zarif said. "Bluster or threats will not get the US a new deal, particularly as it is not honoring the (existing) deal."

Trump has routinely criticized the Iran nuclear deal as "the worst deal ever," but initially followed the advice from his civilian and military officials to leave it alone. But his administration has taken steps to reduce the benefits from the deal for Tehran, including warning foreign companies not to do business in Iran. Trump's new secretary of state Mike Pompeo and new White House national security adviser John Bolton are long time critics of the agreement.

Trump and other US officials last week cited information supplied by Israel on Iran's past nuclear program as justification of Washington's tough stance on Iran. But every other JCPOA signatory — France, Germany, the UK, China and Russia — said UN nuclear watchdog the IAEA should investigate the claims. Russian president Vladimir Putin, who says the JCPOA should be preserved in its current form, is meeting with Israeli prime minister Benjamin Netanyahu in Moscow tomorrow.

The 12 May deadline that Trump said marks the expiry of a waiver on sanctions mandated under the National Defense Authorisation Act for Fiscal Year 2012. This law requires the US Treasury Department to impose sanctions on financial institutions in countries that do not significantly reduce their crude imports from Iran, with review of such purchases every 180 days. Iran's crude exports fell by 1mn b/d in response to the sanctions from 2012-15.

Implementing the law would negatively affect all consumers of Iranian crude, including US allies. But US proponents of scrapping the JCPOA downplay possible countermeasures from Europe and elsewhere.

Iran has boosted output to 3.8mn b/d since the JCPOA was implemented, down from 2.8mn b/d during four years of sanctions.

Iranian crude exports recovered to 2.1mn b/d in 2017 from 1.9mn b/d a year earlier. Around 65pc of its shipments went to customers in Asia-Pacific, including China, India, South Korea and Japan, and the remaining 35pc went to Europe, Argus estimates.