President Donald Trump withdrew the United States from the Iran nuclear deal on May 8, 2018, and ordered the restoration of economic sanctions that had been removed when the deal began, according to a White House statement.

The Iran nuclear deal—formally called the Joint Comprehensive Plan of Action, or JCPOA—was negotiated in 2015. Six other parties signed it: the UK, France, Germany, Russia, China, and the European Union. The deal was straightforward: Iran agreed to restrict how much nuclear fuel it could produce and allow international inspectors to check its facilities. In return, the U.S., Europe, and other nations lifted economic sanctions that had crippled Iran's trade.

Trump disagreed with the deal for two main reasons. First, the agreement had expiration dates built in; the strictest nuclear limits would expire in ten to fifteen years. Second, the deal said nothing about Iran's missiles or its military activity in the Middle East. So Trump pulled out and brought back the sanctions.

The sanctions came back in two steps: a 90-day waiting period for some, then a 180-day waiting period for the most severe ones. The toughest sanctions targeted Iran's oil sales and its central bank — essentially cutting off Iran's ability to sell oil and move money internationally.

Oil prices jumped immediately. Iran had been selling about 2.5 million barrels of oil a day; once sanctions hit, buyers around the world scrambled to buy oil from other countries instead. Traders betting on where oil prices would go assumed Iran would sell less, so they pushed prices up.

European countries were unhappy. France, Germany, and the UK said they still supported the original deal. They tried to protect their banks and companies from the U.S. sanctions by passing their own laws, reasoning that European firms should not have to follow American rules. But that protection did not work in practice. European banks need access to the U.S. dollar system and American financial markets to do business globally. Losing that access would cost them far more than any business they might do with Iran. So European banks stopped dealing with Iran anyway.

The withdrawal also raised what investors call "risk premiums" on Iranian government debt. If you are a bank thinking about lending to Iran, you now worry more that the situation could spiral into military conflict, so you demand higher interest rates to compensate for that risk. This rippled through the broader Middle East too: investors got nervous about anything in the region, especially because Iran can disrupt oil shipments through the Strait of Hormuz, a narrow waterway through which one-fifth of the world's traded oil passes.

The bigger, longer-term question is whether Iran will now restart its nuclear programme. Without the deal and without American pressure, there is less reason for Iran to hold back. If that happens, the risk of military conflict rises—a distant but real concern that weighs on energy markets and credit investors everywhere.

What Trump's move did not do was solve the problem. It put the deal on hold, restored maximum pressure on Iran, and left the other signatories with an agreement that now lacks its strongest enforcer.