President Donald Trump terminated U.S. participation in the Joint Comprehensive Plan of Action on May 8, 2018, and ordered the re-imposition of sanctions on Iran that had been lifted under the accord, according to a White House statement.

The JCPOA — negotiated in 2015 under the Obama administration alongside the P5+1 group of nations (the U.S., UK, France, Germany, Russia, China, and the EU) — had lifted broad sanctions in exchange for Iranian commitments to cap uranium enrichment, reduce centrifuges, and accept enhanced International Atomic Energy Agency (IAEA) inspections. The Obama administration framed this as a verifiable way to prevent Iran from building a nuclear weapon, and positioned it as the centrepiece of U.S. non-proliferation policy in the region.

Trump's withdrawal reversed that calculus entirely. The administration's stated objections focused on sunset clauses — provisions that allowed key nuclear restrictions to expire within ten to fifteen years — and the agreement's failure to address Iran's ballistic missile programme or its regional proxy activities. The re-imposition of sanctions happened in two phases: a 90-day wind-down period for certain categories, followed by a 180-day period for the heaviest-hitting measures, including those targeting Iranian oil exports and the Central Bank of Iran.

Oil markets moved immediately. Brent crude rose as traders priced in reduced Iranian export capacity. Iran had been exporting roughly 2.5 million barrels per day; the threat of secondary sanctions on any non-U.S. company that bought Iranian oil created direct pressure on European and Asian buyers to find alternative sources. For energy analysts, the central question was not whether sanctions would reduce Iranian exports but by how much and how quickly — an answer tied to OPEC+ spare capacity and how rigorously the U.S. enforced the sanctions, both uncertain.

The dollar strengthened slightly against emerging-market currencies exposed to Iran, while European equities with significant Iranian operations — particularly in energy, automotive, and aviation — faced headwinds. European governments objected vocally; France, Germany, and the UK reaffirmed support for the JCPOA, and the European Commission signalled it would invoke its 1996 Blocking Statute to limit the reach of U.S. secondary sanctions on EU firms.

That blocking mechanism, however, has weak enforcement history. The practical reality for a European bank is stark: access to the U.S. dollar clearing system and U.S. capital markets far outweighs Iranian business. Compliance teams at major European financial institutions quickly reassessed their exposure to Iranian counterparties, and the direction was clear. The dollar's role as the world's primary currency for invoicing and settlement — you cannot easily participate in global finance without it — gives U.S. secondary sanctions leverage that no EU law has historically overcome.

For fixed-income and sovereign credit analysts, the withdrawal raised the risk premium on Iranian government bonds and debt issued by state-controlled entities. It also added geopolitical uncertainty to credit spreads across the Gulf region: Iran has the capacity to disrupt the Strait of Hormuz, through which roughly 20% of globally traded oil passes.

The longer-term question — whether a nuclear deal without U.S. enforcement can hold — sits beyond any single market's pricing window but matters for risk scenarios. A JCPOA without U.S. participation reduces the diplomatic and economic pressure keeping Iran compliant. If Iran resumes unrestricted uranium enrichment, the odds of military escalation rise. That distant tail risk feeds into energy supply assumptions, regional credit spreads, and defence sector expectations.

What the withdrawal did not do is resolve the underlying dispute. It reset the negotiating position, re-established maximum-pressure sanctions, and left the other signatories — Russia, China, France, Germany, the UK, and the EU — holding a deal of uncertain durability without its most powerful enforcement partner.