Political scientist on the fragility of the Iran-US deal (with Paul Allen)

The interim deal appears to be another ceasefire that kicks the can down the road on challenging issues like the nuclear program and ballistic missiles. There is healthy skepticism about its durability given the divergence in statements from both sides, the lack of US credibility as a negotiating partner after withdrawing from the JCPOA, and the potential for Israel to act as a spoiler. Logistical challenges for reopening the Strait of Hormuz are immense, and confidence in the region will take time to rebuild.

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University of Melbourne 2.0
University
Dara Conduit 6.5

Political scientist on the fragility of the Iran-US deal (with Paul Allen)

metals

The interviewee's focus is on the fragility of the deal and logistical challenges, which could keep safe-haven demand for gold supported but not strongly directional, as the immediate risk-off premium fades.

wti

Even if there is an imminent peace deal, we still have very low inventories and we still have a couple months that could be pretty challenging ahead... there's still some potential room for upside in prices after the immediate market and title of the headlines.

Asks Dara to speculate on the contents of the MOU, given the lack of details.

Paul Allen
Dara Conduit

This appears to be another ceasefire that kicks the can down the road on all challenging issues. The nuclear issue is thought to be negotiated in the 60 days afterwards. I haven't seen anything about ballistic missiles, which were a sticking point before the war. It doesn't seem substantively different from previous deals.

We just don't know the details.
Asks if the deal signals genuine de-escalation or a temporary tactical move.

Paul Allen
Dara Conduit

It's very difficult to know. Both sides want a deal, but there are many moving parts. There are serious questions about whether the US is a credible negotiating partner after withdrawing from the JCPOA and the talks that happened just before the war broke out. It's hard to be very positive.

Israel has been bombing Lebanon again, which was a big issue in previous iterations of the deal.
Asks about the role of Israel and whether the deal can prevent Israel from acting against perceived threats.

Paul Allen
Dara Conduit

Israel was one of the key players that started the war and is not a signatory. Israel has continued military operations in Lebanon against Trump's wishes. The US-Israel relationship is under strain. Whether Israel acts as a spoiler will depend on how much Trump can get it under control.

There have been very heated phone calls in recent weeks.
Asks about expectations for smooth passage through the Strait of Hormuz for oil, gas, and derivatives.

Paul Allen
Dara Conduit

It will be a logistical nightmare to get things reopened. There are questions of demining, whether it's safe to go through the Gulf, and huge damage to energy infrastructure in Qatar, Kuwait, and Iran. There will also be a lack of confidence; shipping lines will be reticent to return to business as usual after such a volatile period.

The strait has been opened and closed and mined and not mined.
Asks how the political environment in the Gulf will evolve after Iran bombed its neighbors.

Paul Allen
Dara Conduit

Relations between Iran and its Gulf neighbors will face setbacks. The larger political change will be the role of the US. Gulf states allowed US troops on their soil and came under fire, but the US did very little to protect them. This will cause a backlash in US relations with those countries, potentially creating an opportunity for China to move in.

Some states like the UAE seem to be digging in closer to the US/Israel, but others may look elsewhere.

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