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 US.
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.
Trump signed a physical copy of the deal on Wednesday while dining with French President Emmanuel Macron at the Palace of Versailles.
In Tehran, President Masoud Pezeshkian 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 US inflation to 4 per cent 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.
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. 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.
Text of the deal