Will the US-Iran deal, signed between Presidents Donald Trump and Masoud Pezeshkian in the 17th-century French palace of Versailles on June 17, usher in lasting peace? Or will it turn out to be a peace which will be a short period of preparation for the next war between the two countries?
First, it should be recognised that acting together, the US and Israel have neither defeated Iran nor accomplished the regime change they set out to achieve, although its then Supreme Leader Ayatollah Ali Khamenei was killed in an Israeli air strike on February 28.
Second, the Strait of Hormuz will be reopened over a 30-day period, during which Iran will remove the mines it planted along the main navigation channel during the war, while the US will lift its blockade of the Strait.
New Balance of Power
American concerns over Iran’s nuclear programme remain, but the negotiating period for ending it has been extended over a 60-day period. Tehran, however, will be “allowed” to have ballistic missiles because Trump holds that if other countries, including Saudi Arabia and Qatar, have some, then in all fairness, Iran should too. American troops will remain in the Gulf for a while.
Somewhat remarkably, the US will present Iran with a $300-billion aid for “reconstruction”, and Washington will end “all types of sanctions” on Iran. Tehran will now receive economic relief in exchange for lifting the blockade on Hormuz and restoring free passage through the Strait.
Iran’s ability to close down navigation in Hormuz will, in addition to the retention of its ballistic missile capability and its open return to the international oil market, signal its status as one of the most powerful West Asian countries — in spite of being pounded for four months. This outcome, after months of destruction and global economic disruption, marks the greatest foreign policy failure of both of Trump’s presidential terms. The consequences of that failure will make the US’s strategic challenges in West Asia harder than ever to confront.
West Asian states — and other countries, too — are noting the fact that the US failed to achieve a decisive victory against a weaker country like Iran. Washington also showed itself to be unreliable, unpredictable, and erratic. This will damage regional and international confidence in Washington’s ability to maintain stability.
The US’s credibility has eroded.
Israeli Prime Minister Benjamin Netanyahu was pressured by Trump to end the war and stop the strikes on Lebanon. Whether this will cost him an electoral victory later this year is an open question. Israel deployed massive resources into the conflict; its citizens repeatedly faced bomb threats from Iran. Even so, Netanyahu didn’t achieve his endgame of Iranian regime change.
Meanwhile, some Israelis have understandably raised questions about Iran’s sincerity about negotiations over its nuclear programme, now that the US has removed economic and military pressures on Tehran.
The deal has an immediate effect on international oil prices, but the question is whether they will fall at least to the level that existed before the war started and hold there. On Thursday, oil prices fell to the lowest level since the war began.
On another plane, Iran insisted that any ceasefire must include an end to hostilities in Lebanon. Washington accepted that condition.
During the war, for the first time, Tehran responded with missile attacks on Israel in retaliation for Israeli strikes on Hezbollah targets. This reflects an important shift in the Iran-Israel equation and more broadly, in regional security. Like Israel, Iran has asserted its right to intervene beyond its border to safeguard its security. Apparently, Iran has persuaded Trump, who has leaned heavily on Israel, to press Tel Aviv to stop attacks on Lebanon. On March 16, Israel launched a ground offensive again the Iran-backed Hezbollah in Lebanon, which had entered the broader regional escalation stemming from the war with Iran. So far, it is unclear whether Israel will abide by the US-Iran truce.
Meanwhile, sanctions on the sale of Iranian oil will be lifted. A transactional India, which has never condemned the violation of international law by the US and Israel when they mounted their attack on Iran, will buy as much Iranian oil as it can while the going is good.
While a substantial part of internationally blocked Iranian funds are to be released to Tehran, it is uncertain how Trump will manage their transfer, since Washington denies that any funds have been released or will be released upfront.
Even Gulf states like the United Arab Emirates, despite its alliance with the US and Israel, will welcome an early end to the conflict. An important regional country has legitimised the Iranian revolutionary regime while shattering Israel’s dream of emerging as a West Asian superpower despite the alignment of both with the US.
While much of Iran’s civilian and economic infrastructure was destroyed by bombing, it showed its capacity to inflict immense pain on the Gulf states and the global economy by adversely impacting their internationally connected economies.
Outlook
Any renewed breakout of war that would subject Iran to a bombing campaign would simultaneously prolong the economic pain for rich Gulf economies, trigger higher inflation worldwide, and a possible recession in the US. In the event of new peace talks, Iran would have stronger bargaining power, given its ability to highlight America’s strategic incompetence. For, the statecraft of a militarily inferior Iran has clearly made up for its weaknesses.
Disclaimer: The views expressed are the author’s own and do not reflect the official policy or position of Financial Express.