U.S.-Iran Agreement Slated to Be Finalized This Week
There was a sigh of relief Monday with the announcement of a preliminary agreement between the U.S. and Iran concerning the war.
But only for a moment. The agreement doesn’t mean the end of supply chain uncertainty, disruption and risk.
It also doesn’t mean the end of negotiations between the countries. The agreement, a memorandum of understanding that was reportedly signed by President Donald Trump and Iran’s chief negotiator, doesn’t address the major disagreements between the two countries. In fact, its details haven’t been disclosed. Expert surmise it pertains to extending the ceasefire and reopening the Strait of Hormuz.
The signing of the official agreement is slated for Friday in Geneva, Switzerland, with vice president J.D. Vance and Trump’s son-in-law Jared Kushner leading the U.S. delegation.
“World leaders on Monday cautiously welcomed a new cease-fire deal and diplomatic path to ending the U.S. war with Iran, as oil prices tumbled, fighting in Lebanon appeared to ease and Iranians expressed wary relief that a conflict that has killed thousands could soon end,” The New York Times reported.
How Markets Responded
On X (formerly Twitter), President Donald Trump posted: “The Deal with the Islamic Republic of Iran is now complete. Congratulations to all! I hereby fully authorize the toll free opening of the Strait of Hormuz, and, simultaneously herewith, authorize the immediate removal of the United States Naval blockade. Ships of the World, start your engines. Let the oil flow!”
Yahoo! Finance reported that “Iran has confirmed that it will not immediately attempt to collect tolls,” but that Iran and Oman will jointly oversee the ‘administration of maritime navigation services’ in the strait.” Future tolls seem likely.
News of the agreement impacted stock markets and oil prices, with stock markets up and oil down in price. On Monday, the price of Brent crude fell to US$79.26 a barrel, before inching up and falling again. As of noon ET Tuesday, the price hovered around $77.17, well below the high of around $100 a barrel a few weeks ago.
Nasdaq’s 3.07 percent gain Monday was the highest in several months, while other indexes also rose: Dow, 0.92 percent, and S&P 500, 1.65 percent.
Holding Back
Despite the appearance that a deal is in the works, some were reluctant to celebrate.
“President Trump’s declaration that the U.S. and Iran had reached a preliminary agreement to halt hostilities drew cautious optimism and frustration from lawmakers on Capitol Hill, where even some Republicans were reluctant to praise a deal whose terms the administration has yet to disclose,” The New York Times reported.
Israeli prime minister Benjamin Netanyahu also appeared not to be on board — as the preliminary agreement likely doesn’t include the actions he wanted, such as curbing the Iranian ballistic missile arsenal. “The U.S. ceasefire agreement with Iran has presented Israel’s prime minister with a political nightmare, smashing the three cornerstones of Benjamin Netanyahu's political career, and leaving him trapped in a new security dilemma,” the BBC reported.
Still, Netanyahu didn’t criticize the deal, according to The Times of Israel, although “(t)he prime minister emphasized that Israel is not a signatory to the U.S.-Iran deal, and distanced himself from Trump’s decision to sign an agreement.”
(Photo credit: Getty Images/Suphanat Khumsap)