"The prognosis for the Iranian nuclear deal in 2018 also looks fairly bleak, and the persistent threat of a U.S. sanctions snapback could curtail foreign investment in the Iranian energy sector and imperil output expansion plans," Helima Croft, global head of commodity strategy at RBC Capital Markets, said in a recent research note.
Croft lists a potential collapse of the deal as a key risk to oil markets this year. Since sanctions were lifted in 2016, Iran's oil output has risen by about 1 million barrels per day to about 3.8 million bpd. The loss of Iranian exports would likely push up oil prices.
Refusing to grant the waivers is Trump's most direct path to blowing up the deal. It would reimpose far-reaching sanctions that could hobble Iran's energy industry, sever it from the international financial system and put a chill on foreign investment into the country.
Risk consultancy Eurasia Group gives the deal a 55 percent chance of surviving Trump's first term but says it's safe for now. The firm believes Trump will issue the waivers this week but will once again refuse to certify the deal to Congress, which he must do every 90 days under U.S. law. The next deadline for certification is also this week.
Trump's rejection of the deal in October opened a 60-day window for Congress to restore sanctions under a 2015 law. Rather than take that road, lawmakers began to work on legislation that would address parts of the deal the Trump administration opposes.