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The US-Iran agreement promises an end to the war, but its implementation remains unclear

Shippers said it would take weeks before confidence returned after any reopening of Strait of Hormuz. And fundamental questions remain unanswered.

U.S. president Donald Trump announced on Monday that a preliminary agreement had been signed between the U.S.

The interim agreement would prolong a tenuous truce announced in April for another 60 days, and reopen Strait of Hormuz which Iran effectively closed since the U.S. attacked Iran in February.

During the 60-day window, the next round of negotiations will address the difficult issues such as the future of Iran’s nuclear program.

Trump and Benjamin Netanyahu's other arguments for war, including ending Iran's support of regional armed proxy forces and curbing the missile program aren't expected to be discussed during those negotiations.

Trump announced that the deal was signed after arriving in France to attend a G7 summit. He said that Vice President JDVance would be attending a formal signing in Geneva, on Friday.

Oil prices dropped on Monday, to their lowest levels since March 10, just a few days after the Strait of Hormuz was closed between Iran and Oman. This narrow waterway is responsible for one-fifth of all oil trade in the world.

Brent crude futures fell 0.3% in Asian trading to $82.96 per barrel.

The deal is the biggest step forward in resolving the conflict. It has resulted in the deaths of at least 7,000 people - mostly in Iran and Lebanon - and upended the global energy markets.

Masoud Pezeshkian, the Iranian president, wrote in a social media post on Monday that "the interim agreement" was "an important step" towards stopping the fighting. However, he noted that "a final deal to achieve a lasting ceasefire has yet to be shaped."

Vance said on CNN that the memorandum signed was a very general document. U.S. officials said that details would be revealed over the next couple of days.

Vance stated that it contained "a very important sanctions relief package" (for Iran). Later, he told Fox News Trump could decide to release the deal before Friday.

U.S. officials and Iranian officials claim that lifting sanctions, unfreezing assets abroad and creating a $300 billion reconstruction funds, funded by Gulf States, who host U.S. bases, could lead to substantial economic benefits for Iran.

U.S. officials who spoke on condition of anonymity said that Iran must comply with U.S. requirements to never build a nuclear bomb and to stop supporting militias such as Hezbollah, in Lebanon, in order to receive these benefits.

Iranian officials who have denied ever wanting to build a nuke say that they have not given much up by agreeing with the United States to resume diplomatic talks over Iran's nuclear enrichment program. These discussions were interrupted by the war.

REBUILD CONFIDENCE

The latest agreement may lift Iran's chokehold over the Strait of Hormuz but that is only a return to the status quo of the war. Shippers have said they will not resume traffic until they feel confident they can safely transit the Strait.

Chief executive of Japan’s Mitsui O.S.K. Lines, a shipping company with a fleet that includes more than 900 vessels, including tankers, said to the Financial Times that shipowners wouldn't sail through the Strait until they felt confident about the U.S. Iran deal.

"Given what we've seen in the past couple of months, it seems reasonable to assume that it will take a few weeks or even a month," Tamura said before Trump announced his deal.

According to the FT, Tamura's opinion has not changed despite the agreement between Washington DC and Tehran having been finalised.

Iran has indicated that it will maintain a 'control' over the strait with Oman. The U.S. has said that the strait would be toll-free during 60 days, and they expect this provision to be included in a final agreement.

Trump stated in a Truth Social posting that oil-laden ships were beginning to leave the strait "going along the Southern 'Highway', which is completely safe, secure and pristine".

NETANYAHU - "STOOD FIRM"

Another key issue is the fighting in Lebanon between Israel, a U.S.-aligned country, and Hezbollah, allied with Iran. This conflict has resulted in the displacement of 1.2 million people.

Iran said that the 'deal' requires an end to all hostilities in the region, but Netanyahu stated that Israel would maintain its forces in southern Lebanon and retain the right of response to Hezbollah attack.

He said at a Monday news conference that Iran wanted us to pull out of the deal, but he refused. Israel has not taken part in the Iranian peace talks directly.

An official from the United States said that the withdrawal of Israel from Lebanon was not part of the agreement. In March, after Hezbollah entered the war, it had invaded the country.

Abbas Araqchi, Iranian foreign minister, said that Israeli attacks must cease immediately.

(source: Reuters)