Cairo, Jun 18: The interim deal reached by the United States and Iran to end their war will reopen the Strait of Hormuz and bring the two adversaries back to the negotiating table over Tehran’s nuclear program. It will also give Iran an immediate benefit, allowing it to sell its oil freely again, according to details released by both countries.
Besides the new oil revenue for Iran, the two sides are more or less back where they were 3½ months ago — before Israel and the U.S. launched their war, which has left thousands dead across the region, triggered a global energy crisis and shaken the American economy.
Iran and the US will enter a 60-day period of negotiations, and hanging over them will be the question of whether US President Donald Trump can wrest a better deal than the 2015 nuclear accord he scuttled eight years ago.
Here’s what to know based on details released by US officials and Iranian state media:
INTERIM DEAL WILL GET OIL FLOWING AGAIN
Trump signed a physical copy of the deal Wednesday while dining with French President Emmanuel Macron at the Palace of Versailles.
In Tehran, President MasoudPezeshkian signed the document, according to the state-run IRNA news agency, which posted an image of him holding up the deal with his signature and Trump’s.
Under the agreement, the Strait of Hormuz will reopen, and the US will lift its blockade of Iranian ports — both of which should push gas prices down. Passage through the waterway will be toll-free for 60 days, and the deal doesn’t preclude fees after that, according to US officials who spoke on the condition of anonymity to read details of the draft, which has not yet been officially released by Washington.
Iran’s closure of the strait, through which around a fifth of the world’s traded oil supplies passed before the war, proved perhaps its strongest weapon. It drove up global fuel prices, made food and other products like fertilizer more expensive, and helped push U.S. inflation to 4% ahead of this fall’s midterm congressional elections.
With the deal in place, the Islamic Republic has survived the most serious attempt ever by Israel and the United States to topple its government, despite the thundering opening volleys of the war that killed Iran’s supreme leader and other top officials.
IRAN WILL BE ABLE TO SELL OIL FREELY
The deal immediately waives, but doesn’t eliminate, sanctions that Trump imposed on Iran’s oil exports, allowing it once again sell its crude on the world market and restoring a revenue stream worth billions.
Last year, Iran earned an estimated $45 billion from oil sales. But it had only one major buyer, China, and had to ship its crude through a shadow fleet of tankers to elude sanctions, eating into its profits. Under the blockade since April, its exports have nearly ground to a halt.
With the waiver, Iran will likely be able to find more customers and sell its oil for higher prices.
IRAN GETS PROMISES FOR FUTURE
The draft agreement calls for Iran’s highly enriched uranium to be “downblended” — or diluted — under the supervision of the International Atomic Energy Agency, without elaborating. Negotiations on any other restrictions on Tehran’s nuclear program lie ahead.
Trump withdrew from a previous nuclear deal with world powers, criticizing it for giving a huge windfall to Iran. But the interim deal outlines even more lucrative incentives if Iran reaches a new nuclear agreement.
One is the eventual lifting of all international sanctions, which would seem to go further than the 2015 accord. That agreement lifted sanctions related to Iran’s nuclear program but kept others in place over what the U.S. alleged were Tehran’s support for terrorism and rights abuses.
The interim pact also promises a $300 billion fund for postwar reconstruction. It’s not clear where that money will come from — but Trump said the US would not contribute.
To give a sense of the extraordinary scale of the fund, the World Bank estimates that Syria, after 13 years of civil war, needs $215 billion for reconstruction; the Gaza Strip, largely flattened in two years of war between Israel and Hamas, needs USD 53 billion.
The deal also promises to unfreeze billions of dollars worth of Iranian assets held abroad under a procedure the two sides will work out, according to the text provided by US officials.
IRAN’S MISSILES, SUPPORT FOR PROXIES NOT ON TABLE
The Trump administration said its war aims were to “obliterate” Iran’s missile arsenal, “sever its support” for armed proxies in the region, “annihilate its navy,” and ensure it never acquires a nuclear weapon.
The seven weeks of US-Israeli bombardment are believed to have heavily damaged Iran’s missile arsenal and production facilities as well as other parts of its military. How heavily isn’t known, though, and Iran continued to fire on Israel as recently as last week. Meanwhile, Iran’s ties with its militant proxies — Hezbollah in Lebanon, the Houthis in Yemen and Shiite militias in Iraq — appear as strong as ever.
Neither the missile arsenal nor Iran’s support for its allies appears to be on the table in the upcoming negotiations.
WAR IN LEBANON CAN THREATEN DEAL
The deal calls for an end to the war in Lebanon, where Israel has been fighting Hezbollah.
However, Israel and Hezbollah aren’t parties to the agreement. Iran insists Israel must withdraw from the large swath of southern Lebanon it is occupying, but the interim deal doesn’t explicitly require that and only ensures Lebanon’s “territorial integrity.”
Israel has vowed to keep troops in Lebanon, while Hezbollah says it is committed to resisting Israel “until full withdrawal is achieved.” Fighting between the two could derail the deal unless the US and Iran can rein in their respective allies.
US-ISRAELI TIES STRAINED
Israel was squeezed out of the negotiations with Iran, and Israelis from across the political spectrum have called the deal a disaster, directing their fury at Prime Minister Benjamin Netanyahu.
Tensions between Trump and Netanyahu, meanwhile, have occasionally spilled into the open, including when the American president described the Israeli leader as “crazy.” At the G7 summit in France this week, Trump said that Netanyahu “has to be more responsible with respect to Lebanon.” Netanyahu is left in a precarious situation ahead of national elections later this year. His relationship with Trump may require downscaling a military campaign in Lebanon that is broadly popular in Israel.
MUCH DEPENDS ON FINAL AGREEMENT
The 2015 agreement negotiated by the Obama administration severely limited Iran’s nuclear program for 15 years. During that period, Iran could only enrich uranium to a low level, far below what’s needed for a weapon. It could only stockpile 300 kilograms (660 pounds) of the material and had to sharply reduce its centrifuges carrying out enrichment. It was also put under stricter inspections by the IAEA. One main criticism was the 15-year time limit, after which opponents said Iran would be able to quickly ramp up its ability to produce a bomb. Iran insists its nuclear program is for peaceful purposes. A key question now will be whether the US can win stricter limits for a longer term.
