The world heaved a sigh of relief, albeit a cautious or momentary one, as the US and Iran agreed on terms to end the war, despite persisting differences between the two countries over a number of issues.
After unrealistic and bombastic claims by US President Donald Trump and a few false starts, even the credible news of a framework being agreed upon brought cheer to oil markets as prices tumbled and world leaders rushed to welcome it, focusing on denying Iran its nuclear capability and freeing the Strait of Hormuz from its control. Of course, their feigning ignorance about the US-Israel starting military action in violation of the UN Charter, with changing goalposts and without a face-saving off-ramp, is only expected.
All the major points in the agreement are being interpreted differently by the US and Iran. For instance, Tehran claims that Washington will release billions of dollars of frozen assets, while the latter rejects it. Instead, the US maintains that there will be no immediate relief relating to sanctions or financial gains and that an economic “reward” is subject to Iran complying with the deal. Similarly, even on something as critical as the free navigation through the Strait of Hormuz, the devil is in the details. Iran appears to be firm on retaining its “control” as a strategic leverage, as it claims that reopening it within 30 days will happen “under Iranian arrangements”. On the contrary, the Trump administration is insisting that the Strait would be open and “permanently toll-free”.
This divergence is best reflected in the cautious approach being adopted by the shipping industry, which would continue to assess security and other risks. It means the return to pre-disruption conditions is not going to be anytime soon.
The trickiest part is going to be the thorny issue of Iran’s nuclear capability. The moot question is whether substantial and meaningful progress can be made in 60 days of negotiations to resolve the formidable challenge of Iran’s atomic programme. Experts are sceptical about the two-month timeframe, as it took years in the past to hammer out even a limited deal. Again, the US and Iran are clearly not seeing eye to eye, even at the framework level. Much would depend on the fine print and, more importantly, who the US would send for negotiations, as the previous team was reportedly out of its depth during the Omani-mediated nuclear talks.
The biggest threat to the deal would come from a belligerent and recalcitrant Israel, which is pushing back on the deal. In the coming weeks and months, it will become evident if the US can rein in its ally or not. If the US is unable to restrain the Jewish state from pursuing its maximalist goals in the fragile region, it would expose the limits of the superpower’s hegemony, which has been somewhat dented after the conflict. Given the domestic political compulsions, the fabled Jewish influence in US policymaking and challenges to the client-patron dynamic, the US will be navigating choppy waters.
The agreement on cessation of all hostilities and opening of the Strait of Hormuz could pave the way to the return of pre-war conditions. However, a bit of caution could avert counting the chickens before they hatch, as the best laid plans could go awry, more so in this case.