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Welcome to The Geopolity’s What We’re Watching (3W), our daily look at the interconnected worlds of Geopolitics, Economics and Energy. Curated from the world’s leading sources of information, our analysis and commentary is designed to help you make sense of the events driving the major developments in the world.
The US and Iran agreed a ceasefire deal, writes The New York Times. No text of the agreement has been published by either side, leaving it unclear as to what exactly was agreed. The only thing that appears clear, is that the deal brings to an end the resurgence in violence between the two countries over the past two weeks, and opens the door to a reopening of the Straif of Hormuz. US president Trump said the final text of the agreement would be made public “sometime after Friday,” when American and Iranian leaders are expected to formally sign the deal in Geneva, Switzerland.
What both American and Iranian officials have said regarding the deal is that it includes a 60-day ceasefire to pave the way for negotiations toward a final peace agreement. Beyond that, officials from both countries have made conflicting statements about what it contains. Trump said that the deal would prevent the Iranians from ever developing a nuclear weapon. “They fully agree to that, with strong policing powers,” he said. Other US officials said the US agreed to immediately ending its blockade on ships entering and leaving Iranian ports, and release some of the Iranian funds seized by the US, as well as ease some sanctions, if Iran meets certain conditions. Furthermore, according to the US Iran will open the Strait of Hormuz “permanently toll-free,” as it was before the war. The Associated Press adds the agreement includes establishment of a $300 billion fund to help rebuild Iran, if it meets certain benchmarks.
Iranian officials, however, struck a different tone, for example referring to the agreement not as a deal but as a memorandum of understanding, writes The New York Times separately. Iran’s deputy foreign minister, Kazem Gharibabadi, said that Iran’s commitments under the agreement would begin on Friday, when the deal is scheduled to be formally signed in Geneva. He also said that the two sides agreed another ceasefire for 60 days, to enable discussions on all the points of disagreement, including Iran’s nuclear and ballistic missile programs, Iran’s support for groups such as Hezbollah, and management of the Strait of Hormuz. Iran also said that while it has agreed to let ships pass through the Strait again, and agreed not to charge tolls, the country reserved the right to charge fees “in exchange for the services that are provided.”
What both American and Iranian officials have said regarding the deal is that it includes a 60-day ceasefire to pave the way for negotiations toward a final peace agreement. Beyond that, officials from both countries have made conflicting statements about what it contains
A key point of public disagreement about what is in the agreement and what is not, is Lebanon. Iran and Pakistan, a mediator in the negotiations, said the agreement called for an immediate end to military operations on all fronts, including in Lebanon, writes The New York Times. But Israel appears to disagree. Israel’s defense minister, Israel Katz, said that the country’s forces would remain in the swath of Lebanese territory that they have occupied since the start of the war. He added that the area would be “cleared of local residents” and that the Israeli military would continue to demolish houses in the area. Israel’s prime minister Netanyahu said he did not feel bound by the agreement, The New York Times writes separately. “This agreement was made by the US, by the president of the US,” Netanyahu said. “That’s his decision,” he said and repeated the statement for emphasis. He added: “We have our own interests.” He said he had no intention of withdrawing his forces from neighbouring Lebanon. “I want to make clear: We will remain in the security zones as long as required in order to defend our country,” he said.
What this all means, in the 3W view, is the following.
First, the US must have given Iran something in addition to what is spoken about publicly. What is spoken about publicly, namely, does not include anything that would incentivize Iran to open the Strait of Hormuz. The fact that the US refuses to release the details of the agreement, we believe supports this thesis. If the agreement was the “total victory” Trump makes it out to be, the terms would have been released. Because Trump fears attacks by his political opponents over this agreement, the US wants to keep it secret so that the Trump administration can manage the narrative around it.
According to Middle East experts, and former MI6 agent, Alastair Crooke speaking on the Judging Freedom podcast, the US has agreed to the Iranian demand that some $12 billion of Iranian funds are released to Tehran upfront, as well as waivers of sanctions (not lifting of sanctions) on the export of Iranian oil. In other words, the US agreed that it would prove its compliance with the agreement first, after which Iran should follow. If true, 3W notes, this would be a major strategic victory for Iran. We also note, as we did before, that if Iran agreed to anything other than this, in other words if it agreed to having to prove its compliance before the US would be required to do anything, it would effectively surrender the position of advantage it has established for itself over the past two and half months.
The Financial Times also notes that the basic principles of the current agreement are a strategic defeat for Trump. At the outset of the current War, namely, Trump pledged that there would be no deal with Tehran except “unconditional surrender!”.
As to what could have motivated Trump to now make serious concessions to Iran, including the offer to move first, Reuters writes that stocks of crude oil in the US Strategic Petroleum Reserve have fallen to 340.3 million barrels, the lowest level since 1983. Inventories at Cushing, the main storage hub for oil in Oklahoma and the pricing point for US West Texas Intermediate crude futures, fell to 21.6 million barrels, meanwhile, which is near operational lows. In other words, the current status quo has brought the US energy system to breaking point as well.
The fact that the US refuses to release the details of the agreement, we believe supports this thesis….because Trump fears attacks by his political opponents over this agreement, the US wants to keep it secret so that the Trump administration can manage the narrative around it
Second, the announced agreement is much less of the “breakthrough” than it is made out to be – by most, at least. It does indeed appear to be more of an agreement to structure real conversations at a later moment, as the Iranian say, rather than a “total victory”, as Trump makes it out to be, with concrete agreement on key topics such as the nuclear file and the Strait of Hormuz. The ceasefire, and the opening of the Strait of Hormuz, are not permanent, but enablers for talks. This means that if and when the actual talks fail, both the war and the closure of the Strait could easily return.
Thirdly, at this point it remains questionable if talks on the actual subjects of contention will actually materialize, because the current agreement leaves the door open for other parties – Israel – to block any progress. Via Lebanon, Israel can cross Iranian red-lines, namely. On Sunday, just hours before the current agreement was to be announced, Israel appears to – again – have tried to use this leverage to prevent an actual agreement. Trump called Netanyahu about this and told him to back down, writes Axios. “Why did Bibi have to do a fucking attack? I was so pissed off. I let him know. He has no fucking judgement. I let him know that,” Trump said.
At 3W we have previously explained why we do not believe this narrative. This all means that unless the US truly forces Israel to comply with the agreement, which at a minimum would require a cessation of fighting inside Lebanon, the return to the current status quo of “room temperature war” in the Persian Gulf, under which Iran closes the Strait and active fighting occasionally flares up, returns sooner rather than later. As to the question whether the US will this time around use its leverage of Israel, CIA director John Ratcliff is already lobbying inside the Trump administration to block progress of talks between the US and Iran. He is arguing that Iran is unlikely to agree to the concessions regarding its nuclear program that the US has demanded, writes Axios. US secretary of state Marco Rubio and secretary of defense Pete Hegseth are in his camp, which is effectively regurgitating the Israeli talking points that Iran can never be trusted, it is inherently hostile, as well as irrational, to build the view that talking with Iran is useless and pointless. In. addition, Israel allied US congressmen such as Lindsey Graham, and Ted Cruz are pushing for a Congressional review of, and vote on, the agreement, writes The Associated Press. This is noteworthy since they did not have the same demand when the US – Israel Alliance launched its Wars on Iran.
This, in the 3W view, is evidence that Israel should be expected to work to block any progress from here. It might hold back somewhat in Lebanon, to not stand too as exposed as an obstacle to peace, but its agents in elite US circles will be working overtime to ensure Israel’s policies and plans are the basis upon which US policy and plans are formed. This means that Israel will push the US to focus on the subjects that it knows Iran will not compromise on, and on these topics will formulate demands that equate to unconditional surrender by Iran. The fact that US vice president Vance is reported to be doing the formal signing of the current agreement, rather than secretary of state Rubio whose job it is to do such things, we at 3W see as support for our thesis. Vance is much less inclined to go along with Israel than Rubio is. Hence, through making him the face of an agreement that Israel is determined to torpedo, he is being set up to be embarrassed.
At 3W we maintain our fundamental point of view that as long as the US allows Israel to drive its Middle Eastern policy, the current situation will not fundamentally change – and US regional interests, and global soft power position, will continue on their rapid decline.