US-Iran deal promises end to war but how it will work remains unclear

DUBAI/JERUSALEM/EVIAN-LES-BAINS, France – Doubts swirled around the US-Iran interim deal to end the war in the Middle East, as shipowners said it could take weeks for confidence to return after any reopening of the Strait of Hormuz, and fundamental questions remained unanswered.

US President Donald Trump said on June 16 that the deal to halt the conflict between the US and Iran was “done” and going to a second stage, although details have yet to be made public and both countries say a permanent truce is yet to be negotiated.

The interim agreement would extend a tenuous ceasefire announced in April by another 60 days and reopen the Strait of Hormuz, which Iran has effectively blocked since the US and Israel attacked the country in February.

Negotiators would address difficult issues like the future of Iran’s nuclear programme during the next phase of talks, which Iranian Foreign Minister Abbas Araqchi said would start in Switzerland on June 19 after the formal signing of the framework deal.

Trump maintained on June 16 that the interim accord with Iran makes clear that Tehran would never be allowed to develop a nuclear weapon, and he also suggested Syria could be better positioned to disarm Iran-backed Hezbollah.

Speaking ahead of talks with Qatar’s Emir Sheikh ​Tamim bin Hamad Al Thani on the sidelines of the G-7 summit in France, Trump defended the 14-point memorandum of understanding with Iran that has yet to be made public.

“The only thing that really matters to me is Iran will never have a nuclear weapon, and it says it loud and clear,” he told reporters, warning that “all hell will rain down” on Iran if it sought to acquire one.

Two other issues that Trump and Israeli Prime Minister Benjamin Netanyahu used to justify the war – ending Iran’s support for regional armed proxies and curbing its missile programme – are not thought to be on the agenda for those negotiations.

“We have our deal done with Iran, and it should be successful, it goes to a second stage, which I think would be actually easier,” Trump told reporters at a summit of the G-7 group of big economies.

Vice-President J.D. Vance and Iran’s top negotiator, Mohammad Baqer Qalibaf, are expected to attend June 19’s formal signing in Geneva.

Final deal yet to take shape

Oil prices slid to new three-month lows on June 16, a day after tumbling nearly 5 per cent following news of the deal, though industry officials say Middle East oil and gas output will take months to fully recover.

Iranian President Masoud Pezeshkian wrote on social media on June 15 that the interim agreement was an “important step” towards stopping the fighting, but noted that a final deal for a lasting truce “has yet to take shape”.

Vance told CNN that the signed memorandum was a “very general document”. Details would be released over the next two days, US officials said.

Vance said it included “a very significant sanctions relief package” for Iran. He later told Fox News that Trump may decide to release the agreement before June 19.

Both sides still face pressures following a conflict that killed at least 7,000 people, mostly in Iran and Lebanon, and upended global energy markets. The accord exposes Trump to criticism from within his own party, while Iran’s leaders could face the risk of renewed protests if they fail to alleviate economic pressures after a destructive war.

US and Iranian officials say it could eventually deliver substantial economic benefits to Iran by lifting sanctions and unfreezing foreign assets. It could also set up a US$300 billion (S$385 billion) reconstruction fund, paid for by neighbouring Gulf states that host US military bases and were hit by Iranian attacks during the war.

US officials, speaking on condition of anonymity, said Iran would have to satisfy US demands never to build a nuclear weapon and cut off support for militias like Hezbollah in Lebanon to get those benefits.

Iranian officials, who have always denied intending to build a nuclear weapon, say they have given up little by agreeing to resume diplomatic discussions over Iran’s uranium enrichment programme that were interrupted by the war.

European allies have voiced concern that an inexperienced US negotiating team could struggle to secure a robust agreement, potentially leading to a prolonged stand-off.

In 2015, then US President Barack Obama secured a nuclear deal with Iran in exchange for sanctions relief, a process that took two years to finalise. Trump withdrew the United States from that accord during his first term.

“This deal is a wall to a nuclear weapon. His (Obama) deal was a road to a nuclear weapon. My deal, they can’t have a nuclear, they get blown up,” Trump said.

Diplomats and analysts note that Iranian negotiators are highly skilled in nuclear diplomacy, often exploiting weaknesses in their counterparts and buying time to advance their agenda, making the prospect of a comprehensive agreement within 60 days challenging.

Caution over shipping

While the latest agreement could lift Iran’s chokehold on the Strait of Hormuz, which normally carries about one-fifth of the world’s trade in oil and liquefied natural gas, shipowners say a return to normal traffic could take weeks.

One concern is the possible presence of mines in the narrow waterway between Iran and Oman. A thorough minesweeping operation would “take weeks to months”, an official with Greek maritime security company Diaplous told Reuters on June 16.

Iran has suggested it will retain control with Oman over the strait.

The US said the strait will be open toll-free for 60 days, and it would expect that provision to be part of a final agreement.

Trump said in a Truth Social post that ships loaded with oil were starting to move out of the strait, “going along the Southern Highway”. Reuters reported that the US military had been overseeing scores of secretive ship-to-ship oil transfers to keep Gulf energy exports flowing.

Uncertainty over Lebanon

The conflict between US ally Israel and the Iran-allied Hezbollah militia in Lebanon, which has uprooted 1.2 million people, remains another complication.

Iran has said the deal requires a full cessation of hostilities there, but Netanyahu said Israel would keep its forces in southern Lebanon and retain the right to respond to Hezbollah attacks.

“Iran wanted us to withdraw from it, but I stood firm,” he said on June 15.

Trump said on June 16 that he was “not happy” with the way Israel had handled itself in Lebanon as he was trying to reach a deal with Iran. Israel has not directly participated in the peace talks with Iran.

A US official said an Israeli withdrawal from Lebanon, which it invaded in March after Hezbollah joined the war, was not a condition of the deal.

Araqchi said Israeli attacks must stop immediately. REUTERS