Hope versus experience: Optimism over US-Iran deal should be cautious

Oil prices plunged and stock markets soared on news that the United States (US) and Iran have agreed to a deal that will end 108 days of hostilities, which brought significant hardship for the world economy. The agreement, mediated by Pakistan, is reported to have been signed, and the signing ceremony would take place on June 19. The text is yet to be published but available information suggests convergence on some key issues. But many constraints lie between the US President’s exuberant social-media announcements and cautious Iranian official statements. In a Truth Social post, US President Donald Trump said he authorised the “toll-free” opening of the Strait of Hormuz and the immediate removal of the US naval blockade. “Let the oil flow,” he exulted. On state TV, the Iranian deputy foreign minister clarified that the sides agreed to a memorandum of understanding (MoU). This MoU is an interim agreement and the starting point to reach a final deal within 60 days, the timetable extendable by mutual agreement. Though Iran has confirmed the strait would be reopened, the timeline is unclear. Nor is there visibility on how the navigation of the waterway will be managed. US officials have said that the traffic would increase gradually.

 

Under the reported terms of the deal, the US and its regional partners would commit themselves to a reconstruction programme for Iran worth $300 billion. The US will not impose new sanctions and lift existing sanctions in accordance with an agreed timetable and release $25 billion of Iran’s frozen assets. The last stipulation is reportedly absent in the US version. According to the draft, the nuclear programme will be subject to later talks. Iran reiterated its position that it would not produce or acquire nuclear weapons, and refrain from further enrichment. The US has apparently agreed to allow Iran to dilute its uranium stockpiles on Iranian soil. Pakistan has stated that the agreement includes the cessation of all military operations, including in Lebanon, where Israel is pursuing Iran-backed Hezbollah. Israel, however, insisted that its forces would remain in the country. This divergence between US intentions and Israeli aims remains the sticking point in any deal with Iran. 

The world has seen this play before, when failure to agree on a deal ended in hostilities by the US and Israel on February 28. On April 11, a ceasefire was followed by fresh negotiations, this time involving US Vice-President J D Vance. Those talks collapsed after a marathon 21 hours. Two days later the US implemented a naval blockade of the Strait of Hormuz. Meanwhile, Israeli hostilities in Lebanon, which began in March ostensibly to eliminate Hezbollah, have not abated. Israel did not observe a ceasefire brokered in Washington. Now Tel Aviv maintains it is not part of the US-Iran negotiations. But its freelance actions as West Asia’s sole nuclear power have magnified concern in Iran, which is a signatory to the Nuclear Non-Proliferation Treaty but Israel is not. There is evidence that Mr Trump has finally understood the Israeli obstacle to West Asian peace. How effectively he can restrain his ally, given the powerful bipartisan pro-Israeli lobby in the US, could determine the outcome of this latest attempt at peace.