THE US-IRAN MOU
As this edition of LMD goes into print – and at long last! – the US and Iran announced on 14 June that they had agreed on a framework to end their war, suspend America’s blockade of Iranian ports and reopen the Strait of Hormuz – news that saw the price of Brent crude oil fall by four percent to slightly above US$ 84 a barrel at the time.
The long awaited MOU, inked ahead of scheduled talks in Switzerland on 19 June, will see a number of other pledges between the two nations – including, it has been reported, a pause in hostilities in Lebanon.
THE US-IRAN DEAL: REALITY OR PIPE DREAM?
Saro Thiruppathy wonders whether the US-Iran MOU has the potential to permanently end hostilities between the two nations in the next 60 days
Trump said the Strait of Hormuz, which is a major shipping route for global oil and gas supplies that Iran has effectively shut down for months, would open upon signing the MOU – and that he had ordered an end to the US blockade of Iranian ports.
“Ships of the world, start your engines. Let the oil flow!” he exclaimed.
US-IRAN DEAL “The deal with the Islamic Republic of Iran is now complete,” US President Donald Trump wrote on his Truth Social platform.
His post came shortly after Pakistan’s Prime Minister Shehbaz Sharif, whose country has been instrumental in mediating between the two parties over recent months, announced that a deal had been struck.
Meanwhile, Iran’s Deputy Foreign Minister Kazem Gharibabadi revealed that a more expansive agreement would be negotiated during a 60 day ceasefire period, which is to include relief from sanctions. The fate of Iran’s nuclear programme will also be addressed during this time, he added.
The agreement was reached despite Israel’s strike on Lebanon some 24 hours before its announcement, which drew criticism from both Iran and Trump. Israel’s Prime Minister Benjamin Netanyahu has differed with Trump over American demands that Israel curb its military actions in Lebanon.
According to reports, there will be a phased suspension of US energy-petrochemical sanctions and US$ 24 billion in Iranian funds are to be released. And the two parties will have a 60 day window during which the dismantling of Iran’s nuclear programme is to be discussed.
US-ISRAEL NEXUS However, it is widely believed that the Americans are reluctant to make decisions without the consent of the Israelis because of the nexus between their two countries.
So while the US president was trying to reach an agreement with Iran to end hostilities, the global community has been sceptical about whether it would yield a permanent ceasefire between the warring nations.
Washington has always accepted Tel Aviv’s claims that Iran has nuclear weapons in its arsenal and therefore, poses an existential threat to Israel.
This belief has remained intact even though the US’ Office of the Director of National Intelligence (ODNI) informed Trump last year that Iran doesn’t possess any nuclear weapons and nor was it in the process of refining uranium for use in such weapons.
HEZBOLLAH ISSUE Sharif said in a post on X that the pact called for “the immediate and permanent termination of military operations on all fronts, including in Lebanon.”
Indeed, Lebanon has been a sticking point in negotiations as both Israel and Hezbollah have ignored calls from Trump and others to stop their attacks on each other in recent weeks. It is left to be seen whether the MOU will be a catalyst for a thaw in hostilities between the two parties.
KILLING FIELDS More than 7,000 people have been killed in Iran and Lebanon since US and Israeli forces attacked the former on 28 February.
In response, Iran has struck Israel and Gulf states that host American bases, and blockaded the Strait of Hormuz, pushing up global energy prices – and the US blocked Iranian ports as a countermeasure.
In the United States, the war has become a political liability for Trump and his fellow Republicans in congress. Public opinion polls have suggested that Americans are frustrated by rising gas prices ahead of November’s midterm elections.
And Trump has faced pressure from members of his own party, who insist that Iran’s nuclear programme must be completely shut down. Republican Senator Lindsey Graham, a leading Iran hawk, praised the deal but said he would be “watching closely” the coming negotiations on the nuclear programme.
“Under our law, any nuclear deal with Iran will be sent to congress for review and a vote,” he noted.
GLOBAL RESPITE Should proceedings follow what we have heard so far, the prospect of free flowing oil and other essential commodities from the Middle East will see a world in turmoil breathe a sigh of relief, as the prospect of lower oil prices will ease the economic and social challenges that many nations have faced since the US and Israel attacked Iran at the end of February.
Import dependent countries such as Sri Lanka in particular will reap the ensuing upsides – including possibly an end to any further currency depreciation.
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