Despite the brief media confusion this morning, at 2pm ET this afternoon, Trump unveiled his latest skill, namely the "art of exiting the deal" when he announced that he will pull the US out of the "unacceptable" Iran nuclear deal by not re-signing the sanctions waiver, while instituting the "highest level of sanctions" against Iran, even if Trump did not explicitly unveil new sanctions besides those which already existed. At the same time, Trump explicitly left the door open for a new deal, so there is the possibility - reflected in the oil price - that as one deal ends, a new one may be negotiated.

There was more confusion over the timing of next steps, where as Treasury Secretary Steven Mnuchin announced, "Sanctions will be reimposed subject to certain 90 day and 180 day wind-down periods. At the conclusion of the wind-down periods, the applicable sanctions will come back into full effect. This includes actions under both our primary and secondary sanctions authorities."

Adding to the complexity of the deal unwind is that the US decision was unilateral, with the rest of JCPOA signatory countries - Germany, UK, China, France and Russia - committed to remain in the deal. While we await responses from all signatories, so far the EU's reaction has been the most vocal, with Europe vowing to uphold the Iran deal despite the US exit. How this can be implemented in practice despite Trump's warning that any nations that transact with Iran will also be subject to sanctions, remains to be seen.

Further complicating matters is Iran's stated desire to remain in the deal, and continue under the terms of the Nuclear Deal.

IRAN SAYS WILL START TALKS WITH EUROPEAN NATIONS, CHINA, RUSSIA

ROUHANI: FROM NOW ON, JCPOA IS BETWEEN IRAN AND 5 COUNTRIES

IRAN IS COMMITTED TO ITS OWN OBLIGATIONS, U.S. IS NOT: ROUHANI

Iran's reaction is understandable as a prompt, unilateral withdrawal from the deal risks crippling Iranian oil exports while raising the risk of an Israeli attack on its military and/or research facilities.

Adding to the hesitancy about immediate consequences, Bloomberg adds that the “snap-back” of penalties on Iran isn’t immediate, instead kicking in over six months. That could allow time to negotiate a new accord to replace or supplement the deal agreed to during Barack Obama’s presidency.

Still, Trump’s order blocks new contracts immediately and sets 90- and 180-day clocks for companies with existing Iranian business commitments. By August or November, they’ll have to comply with a broad array of sanctions targeting the Iranian Central Bank and Iran’s financial sector, oil industry, shipping and other economic pressure points.

Trump also made clear he expects to achieve a new deal that lifts the penalties.

“The fact is they are going to want to make a new and lasting deal, one that benefits all of Iran and the Iranian people, ” Trump said. “When they do, I am ready, willing and able.”

Unless Trump is satisfied or changes course, here is what will happen, courtesy of Bloomberg:

August Sanctions

The first deadline is Aug. 6. By then, companies must wind down holdings of Iranian sovereign debt or Iranian currency. Any person or company that assists the Iranian government with acquiring or purchasing U.S. dollar banknotes also will be subject to sanctions by that date.

Sanctions also snap back into place Aug. 6 on Iran’s trade in gold and other precious metals, graphite and coal, metals such as aluminum and steel, the country’s automobile sector and luxury products such as Iranian-origin carpets and caviar.

November Sanctions

Sanctions targeting companies doing business with Iran’s oil industry are reinstated Nov. 4, including penalties against foreign financial institutions that conduct significant transactions with the Central Bank of Iran.

On top of that, the U.S. will impose sanctions on Iran’s energy sector and on petroleum-related transactions with firms including National Iranian Oil Company, Naftiran Intertrade Company, and National Iranian Tanker Company.

RBC Capital Markets chief commodities strategist Helima Croft said that “depending on the enforcement rate” she expects Iranian oil exports to be curtailed by between 200,000 and 300,000 barrels per day. By comparison, 1 million to 1.5 million barrels were removed from the market daily when the Obama administration and other world powers jointly sanctioned Iran to force it to the negotiating table before 2015.

The U.S. advised countries that want to avoid sanctions on their financial institutions to reduce their volume of crude oil purchases from Iran during the 180-day wind-down period. The State Department will determine on a case-by-case basis whether countries have sufficiently cut their Iranian imports.

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That's not all, however, as it is possible that "more sanctions will follow as new information comes to light,” White House National Security Adviser John Bolton told reporters in a briefing following Trump’s announcement. “And that’s something we should pursue vigorously because we want to put as much economic pressure on Iran as we can and deny them the revenues they would have gotten from the transactions we’re not eliminating.” He didn’t specify what other industries or companies could be targeted.

An immediate consequence of Trump's withdrawal is that billions of dollars of deals will be scuttled even before the sanctions fully take effect. All the uncertainty will have a “potentially devastating chilling effect” on business, said Tony Blinken, a former deputy secretary of State under Obama.

One major U.S. exporter may be especially impacted: Boeing. The company has signed a $3 billion deal for 30 737 Max jets with Iran Aseman airline and a $16.6 billion deal with national carrier Iran Air for 80 aircraft.

“That deal would be in jeopardy and thousands of jobs in various locations of the U.S. would be in jeopardy,” Jane Harman, CEO of The Woodrow Wilson International Center for Scholars and a former Democratic House member from California, said in congressional testimony on Tuesday. “We will consult with the U.S. government on next steps,” Gordon Johndroe, a Boeing vice president, said in a statement.

Airbus Group SE’s contract with Iran for 100 jetliners worth about $19 billion at list prices could also be endangered, as could a 20-year, $5 billion agreement Total SA and China National Petroleum Corp. signed to develop part of Iran’s South Pars offshore gas field.

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Looking at the regional fallout, now that the JCPOA deal in its original format no longer exists, it gives Israel a motive to launch a "preemptive" attack, as it can claim it is merely doing so now before Iran has fully developed nuclear weapons; meanwhile Iran's new bff, Saudi Arabia, also has its eyes on Iran, which has become a proxy state for non-western forces in the region, including Russia and China, and thus is destabilizing to the existing status quo.

Yet even if it were to "remain" in the deal, Iranian oil output would likely be impaired modestly, with some estimating anywhere between 200k and 500kb/d being taken offline, and send the price of oil higher; that said, much of this has already been priced into the market. This was confirmed by WTI staying around $70 after the Trump announcement. An analysis by the Center for Strategic and International Studies concluded that the loss of Iranian volumes would be more likely to be replaced by US condensate and light oil barrels ‘if’ Iranian condensate/light ends are covered by the sanctions. "And even in that case, price discounts would be assumed if alternative light sources from Libya, Angola, and Nigeria were to reenter the market in volume." Meanwhile, China might continue to import some oil from the United States to appease the president and deflect trade imbalance challenges.

The question then shifts to how Iran's geographic neighbors may react, starting with...

Israel: as we noted earlier, PM Netanyahu wasted no time to express his pleasure with Trump's announcement which took place just one week after the PM held an ornate and theatrical show, "proving" that Iran may have been developing nuclear powers:

NETANYAHU CONGRATULATES TRUMP ON CORRECT DECISION

NETANYAHU HAILS TRUMP'S 'BRAVE' DECISION TO LEAVE NUKE DEAL

As we discussed yesterday, the collapse of the deal in its current format may prompt Israel to launch a "preemptive" attack on Iran, which is one again "free" to develop nuclear weapons. All Israel would need is just the right provocation, or "false flag" event to frame the next middle eastern war as one of Iranian aggression.

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Saudi Arabia: the Muslim country has once again found itself on the same side as Israel, amid the ongoing challenge for regional dominance and influence. Conveniently, in the upcoming proxy war between Iran/Syria on one hand and Israel/Saudi Arabia on the other, the Saudis have the backing of Trump and Europe, while Iran has the support of Russia, Turkey, Syria - of course, and most recently, China. Just like Israel, now that the deal is no more, Riyadh may also stage a false flag attack against itself (either blaming Iran or Iran-influenced Houthi rebels). Yet while such an extreme confrontation may not be especially likely, at least in the immediate future, it is guaranteed that Saudi Arabia together with Israel will do everything in their power to suppress Iran in every way possible.

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Syria and Yemen: both war-torn nations are ideologically aligned with Iran, with Tehran military support and/or an Iranian-funded militia active in the two nations. The two nations are also directly and indirectly fighting Saudi Arabia and Israel, which have been arming and funding insurgent/rebel forces in the two countries. As such, it is likely that should the conflict with Iran escalate, than the regional wars involving Syria and Yemen will follow suit.

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Europe: Unlike the US, Europe has expressed a desire to continue working under the parameters of the Nuclear Deal as Europe has been a happy client of Iranian oil exports which it tends to buy at below market prices. And while Iran will likely continue to export its oil to Europe (as well as Asia), it remains to be seen how strict Trump will be in his threats to crack down on any nation that engages Iran. However, one thing is certain: Iran - which will again be kicked out of SWIFT - will likely never again use US Dollars as the underlying currency in any deals or transactions.

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Russia: Moscow has repeatedly warned the US not to exit the deal, and in this way Putin is aligned with Europe. Russia will continue to provide weapons to Iran/Syria in exchange not so much in exchange for commodities but to make sure that Russia preserves a critical middle eastern regional outpost and zone of influence in Iran, together with Syria.

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China: for now Beijing's intentions in the middle east remain unknown. That may change very soon as the posturing ahead of the next proxy war escalates.