Updated

President Donald Trump on Tuesday pulled the United States out of an international agreement aimed at stopping Iran from obtaining a nuclear bomb, and said he would reimpose economic sanctions on Tehran immediately.

The decision is likely to raise the risk of conflict in the Middle East, upset America's European allies and disrupt global oil supplies.

"This was a horrible one-sided deal that should have never, ever been made," Trump said at the White House. "It didn't bring calm. It didn't bring peace. And it never will."

The 2015 deal, worked out by the United States, five other international powers and Iran, eased sanctions on Iran in exchange for Tehran limiting its nuclear program.

Trump says the agreement, the signature foreign policy achievement of Trump's predecessor Barack Obama, does not address Iran's ballistic missile program, its nuclear activities beyond 2025 nor its role in conflicts in Yemen and Syria.

Trump said he was willing to negotiate a new deal with Iran, but Tehran has already ruled that out and threatened unspecified retaliation if Washington pulled out.

Iranian state television said that Trump's decision to withdraw was "illegal, illegitimate and undermines international agreements."

Renewing sanctions would make it much harder for Iran to sell its oil abroad or use the international banking system.

The Iran deal may remain partially intact, even without the United States. Iranian President Hassan Rouhani suggested on Monday that Iran could remain in the accord with the other signatories that stay committed to it.

Trump's move is a snub to European allies such as France, Britain and Germany who are also part of the Iran deal and tried hard to convince the U.S. president to preserve it. The Europeans must now scramble to decide their own course of action with Tehran.

China and Russia are also signatories to the Iran deal.

The Iran deal may remain partially intact, even without the United States. Iranian President Hassan Rouhani suggested on Monday that Iran could remain in the accord with the other signatories that remain committed to it.

"Iran is monitoring US and European stance closely and will react to US decision based on its own national interests," Iran's deputy foreign minister, Abbas Araqchi, was quoted as saying by Iranian news agency IRNA. 

US President Donald Trump displays a presidential memorandum after announcing his intent to withdraw from the Iran nuclear agreement.

FEAR OF ESCALATION

Iran's growing military and political power in Yemen, Syria, Lebanon and Iraq worries the United States, Israel and US Arab allies such as Saudi Arabia.

Israel has traded blows with Iranian forces in Syria since February, stirring concern that major escalation could be looming. 

Crude oil prices have been rallying in recent days, largely on expectations the United States would withdraw from the Iran pact and reinstate sanctions. Since the deal was put in place, Iran has increased exports to about 2.5 million barrels a day, up from around 1 million bpd in 2015.

The belief among oil investors has been that financial sanctions that restrict other countries' ability to invest in or do business with Iran will cut off supply - although these effects would likely not be felt until late 2018 or early 2019.