An interim agreement between the U.S. and Iran, set for signing Friday in Switzerland, will immediately allow Iran to sell its oil without restrictions and will reopen the Strait of Hormuz, a crucial passage for global oil and natural gas. The deal follows a war initiated by the U.S. and Israel less than 4 months ago, which had closed the strait and created a historic energy crisis.
The leaked accord also envisions Iran receiving at least $300 billion to rebuild after an intense U.S. and Israeli bombing campaign. While U.S. Vice President JD Vance stated Gulf Arab nations would invest this amount, President Donald Trump clarified Wednesday that the U.S. would not contribute, leaving the investment to other countries. The agreement further stipulates that the U.S. would work to end all American and United Nations sanctions imposed on Tehran if a final agreement addressing Iran's nuclear program is reached.
Capital's Re-alignment
The immediate allowance for Iran to sell oil freely and the offer to eventually lift all sanctions represent significant concessions, exceeding the terms of Iran's 2015 nuclear deal, from which Trump withdrew in his first term. Iran's oil export revenues in 2024 exceeded $46 billion, with China reportedly purchasing at below-market prices due to sanctions. Granting oil waivers at the outset of the 60-day talks strips the U.S. of a major point of economic leverage, as sanctions on Iran's oil were only lifted at the conclusion of the 2015 deal.
The reopening of the Strait of Hormuz is designed to restore pre-war traffic levels within 30 days, re-establishing the flow of a fifth of all oil and natural gas traded globally that passed through it before the conflict. The deal also includes the lifting of a blockade imposed on Iranian ports by the U.S., acknowledging that Iranian mines may need to be destroyed to ensure safe passage for commercial shipping.
The State's Coercive Hand
The U.S. and Israel went to war on Feb. 28, less than 4 months ago, citing the prevention of an Iranian nuclear weapon as a primary goal, though Trump's stated objectives in the conflict repeatedly shifted. Despite the interim deal, President Trump maintained a posture of imperial garrison, stating Wednesday, "You never know with deals, do you? But you're going to find out pretty soon," and adding, "It's a memorandum of understanding, and if I don't like it, we'll go back to shooting at them, dropping bombs." This statement underscores the state's ultimate reliance on military force to enforce its will and protect accumulated wealth.
The agreement also addresses the fighting in Lebanon between Israel and the Iranian-backed militia Hezbollah. However, Israel has maintained its intention to continue defending itself and occupying vast swaths of Lebanon, while Iran insists Israel must withdraw under the deal, a provision not mentioned in the leaked versions. This divergence highlights the limits of the accord in addressing regional power dynamics and territorial control.
Temporary Truce, Enduring Power
This interim deal sets a 60-day window, which can be extended, for negotiations over limiting Iran's nuclear program. The full lifting of sanctions and the release of frozen assets are contingent upon progress in these nuclear talks, according to officials from Pakistan, a key mediator. This conditional approach ensures continued U.S. leverage over Iran's economic reintegration, preventing a complete shift in the distribution of power.
The accord appears to be a major setback for Israeli Prime Minister Benjamin Netanyahu, who has faced criticism at home as details emerge. White House communications director Steven Cheung dismissed a leaked version online, stating it "does not reflect the language of the actual" agreement without further elaboration, while Iran's semiofficial Tasnim news agency also reported missing portions from a leaked version. These discrepancies and the conditional nature of the agreement suggest that while hostilities may pause, the underlying structural contradictions and power struggles persist, managed rather than resolved by such temporary arrangements.