The decision by U.S. President Donald Trump to pull his country out of the Iran nuclear deal has already wreaked widespread economic damage to Iranians. According to intelligence assessments presented to Israeli leaders, the chain reaction of the American decision last month has been more severe than originally forecast.
Some American companies, among them airplane manufacturer Boeing and General Electric, which signed contracts to supply equipment to Iran’s outdated oil industry, are already preparing to halt their investments in the country.
It was reported this week that sports equipment maker Nike canceled at the last minute a delivery of soccer cleats to the Iranian national squad, which is participating in the World Cup starting Friday in Russia. In Europe, British Petroleum announced that it would end its investment partnership with the Iranian oil company in deep-sea drilling off the Scottish coast.
According to Israeli intelligence, Iran had hoped to reap sizeable profits from deals with European and American companies during the coming period. However, now the Tehran regime faces abandonment by companies that already signed contracts, in addition to the negotiations with other companies, because of the American move. Thus, internal pressure on the regime, in the form of frequent demonstrations by the opposition in cities across the country, is also coming into play. Most of the demonstrations focus on the cost of living.
Israeli intelligence officials have the impression that the double economic pressure, domestically and from abroad, is accelerating the division at the top of the regime between the conservative camp and the more moderate one. Part of the dispute involves the question of Iranian foreign aid to terrorist and guerilla organizations across the Middle East. According to various assessments, Tehran disburses nearly $1 billion annually to these clients, including Hezbollah, Shi’ite militias fighting on its behalf for the Assad regime in Syria, Houthi rebels in Yemen and two Palestinian organizations in the Gaza Strip, Hamas and Islamic Jihad. The moderate camp supports cutting these expenditures. Some protesters in Iran have made vocal calls or waved signs condemning the use of government funds for these purposes at the expense of the Iranian people.
Boeing will not deliver aircraft to Iran in light of US sanctions, effectively aborting a pair of large contracts with Iranian carriers, a Boeing spokesman said on Wednesday.Peugeot suspended its Iran expansion plans. Mazda and Hyundai suspended deals. And Iran's Mehr news agency lists even more companies pulling out:
“We have not delivered any aircraft to Iran, and given we no longer have a license to sell to Iran at this time, we will not be delivering any aircraft,” the Boeing spokesman said.
South Korea’s Daelim Industrial said on Friday that a contract worth 2.23 trillion won ($2.08 billion) for a refinery project in Iran was canceled amid the fear of sanctions from Trump administration.The good news is that Iran is still keeping its end of JCPOA in fear of losing even more business from Europe.
The order was canceled as the Esfahan Refinery Upgrading Project failed to procure financing because of economic sanctions imposed on Iran, Daelim said in a regulatory filing.
In recent weeks, European companies such as oil giant Total SA, plane maker Airbus SE and industrial conglomerate Siemens AG have said they were pulling back from Iran opportunities to comply with US sanctions.
General Electric Co. also is closing its office in Tehran due to the US sanctions on Iran. The company is planning to end sales of oil and natural-gas equipment later this year in Iran, people familiar with the matter said
From all indications, all the people who warned that Trump scuttling the deal would be catastrophic have been shown to be 100% wrong.
(h/t Yoel)