So much for making Kharg Island into Uncle Sam Gas & Go. At least for now, anyway.
Not for the first time, Donald Trump has announced that a deal is imminent enough to call off military action against Iran. He posted the announcement to Truth Social, claiming that Iran’s leadership “at the highest level” has agreed in principle to the terms demanded by Trump:
Based on the fact that discussions with the Islamic Republic of Iran have been brought to the highest level of Iranian leadership and approved, I have, as President of the United States of America, cancelled the scheduled strikes and bombings against Iran this evening. Discussions and final points have been, in both concept and great detail, approved by all parties involved, including the United States, Israel, Saudi Arabia, UAE, Qatar, Turkey, Pakistan, Bahrain, Kuwait, Jordan, Egypt, and others. The Naval Blockade will remain in full force and effect until this Transaction is finalized — Time and place of the signing to be announced shortly.
Perhaps the Kharg Island threat worked. Axios’ Barak Ravid reports that Iran made key concessions after Trump warned that the US would seize it “soon”:
Trump has claimed an agreement was close multiple times before, and Tehran has yet to confirm his latest claim. However, three sources briefed on the talks told Axios that key gaps were resolved during talks between Iranian officials and Qatari mediators on Wednesday. …
The sources said the gaps were narrowed on three key issues:
- The mechanism for releasing Iran’s frozen assets — the most important issue for the Iranians.
- Arrangements for reopening the Strait of Hormuz during the 60-day ceasefire period.
- How negotiations over Iran’s nuclear program will be conducted during the 60-day ceasefire period.
Bear in mind that this is not an actual peace deal. The only deal made at this point – assuming it has been made at all – is for the framework of later negotiations while unwinding the Hormuz crisis on both sides. As Ravid notes, the IRGC refused to commit even to this framework without getting all of its frozen assets up front, similar to the Barack Obama JCPOA.
Did Trump agree to that to get the framework in place? That seems doubtful, considering the leverage he’d give up when it comes to the nuclear issue. He may have parted with a portion of those assets as a sweetener, but if he did and Iran reneges again as it did on the Strait of Hormuz in the previous ceasefire, then we know where those funds will be directed.
Nevertheless, a framework that actually releases the Hormuz traffic will provide immediate economic benefits. While watching the oil markets today, I was struck that the prices actually drifted downward this morning, even with the ceasefire clearly over for the present. Either traders thought renewed action would accelerate negotiations, or that the US would soon destroy Iran’s ability to interfere with traffic through the Strait. A return to normal traffic will allow the US and its allies to refill its strategic reserves too, at lower rates, while the US will be able to ease back on its petroleum exports that Trump accelerated to stabilize the global markets. Inflation pressures will likely ease quickly, clearly a concern for Trump and Republicans despite Trump’s cavalier remark about it this week.
Still, we have been here before with the IRGC. Trump has insisted for two months that a deal was all but set, or at least the framework to negotiate a deal on US terms, only to have Iran dispute it or reject proposals. This time, Trump didn’t just offer a proportional response to an Iranian attack, but instead opted for overwhelming force that did structural damage to the IRGC, with the threat of seizing their oil industry permanently. Is that enough to force a capitulation by the mad mullahs and their military junta? We’ll see, but I’d bet we’ll be right back at Bridge and Power Day soon.
Editor’s Note: For decades, former presidents have been all talk and no action. Now, Donald Trump is eliminating the threat from Iran once and for all.
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