Tag: president-trump

As always, the contents of this blog constitute a compendium of multiple media reports supplemented by my personal opinion where indicated.

Apparently, after several months of fighting and several weeks of on and off negotiations Iran and the US have agreed on a deal to end hostilities. (Sort of, maybe, kind of, perhaps.) Vice President J. D. Vance said the U.S. signed a peace agreement with Iran “digitally” on Sunday. He characterized it as a major step toward peace. He stated the deal “ensures that Iran will never have a nuclear weapon,” the Strait of Hormuz will be reopened, and none of the frozen funds has been released to Iran yet. He added the deal would “change the Middle East” (predicated on Iran’s compliance with it). Major allies, including France, Germany, Italy, the United Arab Emirates and the United Kingdom praised the announcement and agreed “to lift relevant sanctions in response to clear, verifiable steps by Iran on its nuclear program.”

At first blush, this is good news, however, given Iran’s negotiating history I wouldn’t get too excited yet. I, for one, am skeptical. Even after the final agreement has been signed as planned, I will remain skeptical. I just don’t trust Iran to live up to whatever agreement it signs. In my opinion it will lie, obfuscate and cheat. Moreover, I am not the only one who has expressed that opinion. Independent verification of compliance to the terms of any agreement will be crucial.

The initial reaction of the financial markets has been very positive. Both US and foreign markets have posted sizeable gains. The price of U.S. crude oil declined over 5% in early Monday trading to around $80 per barrel, while international Brent crude fell about 4.5% to $83 per barrel. For both benchmarks, these levels were the lowest since the first week of March, just days after the war with Iran commenced. Heating oil declined 3%, while wholesale gasoline prices dropped 4%. Natural gas futures fell 3%. This was in addition a 6% decrease in oil prices during last week in anticipation of an agreement. In addition, I have noticed a drop in the price of gas at the pump, which is very discernible to voters.

Not everyone is so ebullient. For example, various Israeli officials have criticized the deal. Israel has consistently been more aggressive toward Iran than the US and, given their hostile history, for good reason. Prime Minister Netanyahu has yet to comment on it (the word is he hasn’t been provided a copy yet, which is curious since Israel has been our principal ally in this war), but Israeli Defense Minister Israel Katz stated that IDF forces will not be withdrawing from Lebanon despite whatever the deal may say. That could be significant as discussed below.

Many news outlets are referring to the deal as “preliminary,” which is disquieting in and of itself. Even VP JD Vance, in an interview with CNBC, described the agreement as but “a major step towards peace,” not a “done deal.” In addition, he declined to divulge specific details of the deal. Again, the devil is in the details. The full text of the agreement has not been made available yet, which is suspicious in and of itself. But emerging details have suggested that some of the most difficult issues, including the fate of Iran’s nuclear program, have been deferred to future rounds of negotiations. Absent a resolution of the central issues how can the negotiators maintain that there is a deal?

In my view we are still a long way from a final agreement. There are a plethora of issues and details that still remain to be finalized. I will outline some of these below. As I said in the title, the devil is in the details. For instance:

1. According to many analysts and commentators it is likely that negotiators on each side will interpret the vague language differently, either intentionally or unintentionally leading to misunderstandings and worse.
2. It does not address, in sufficient detail, the US’s primary objectives of the war, namely eliminating Iran’s prospective nuclear capabilities, the surrender and disposal of its “nuclear dust,” and Iran’s terminating its support of “proxy” terrorist groups. Those were the main purposes of the war. Any deal that excludes acquiescence with respect to those issues would be worthless.
3. The United States and Iran have reached a preliminary agreement to cease hostilities for 60 days, but how will the cease fire be monitored, by whom, what will constitute a violation, and what will be the penalties for said violations? And what of the ongoing hostilities between Israel and Hezbollah in Lebanon? Iran has continually insisted that that conflict must be included in any deal, in which case the cease fire would already have been violated, whereas the US has insisted it is a separate matter.
4. Since its commencement on February 28, the war has not produced many of the results President Trump had vowed to achieve, such as overthrowing Iran’s autocratic, theocratic leadership and liberating its citizens, which are among the most oppressed in the world. Will those issues be included in any deal or not?
5. The language regarding the reopening of the Strait of Hormuz is extremely vague. For example, when will it reopen? Who will ensure all the mines have been removed or destroyed? Who will govern the passage of ships through it? Will Iran be precluded from charging fees or not?
6. There are questions regarding the US’s blockade of Iranian shipping. The U.K. Maritime Trade Operations Group, which acts as the chief point of contact for merchant ships liaising with military forces in the region, warned that the U.S. blockade on Iranian ports will remain in effect until the peace deal with Iran has been signed. The UKTMO then followed up with a memo warning all vessels not to attempt a crossing until “explicit direction is given” (presumably by them and presumably not until the cease fire is in effect).

Conclusion

President Trump has invested a considerable amount of military assets, time, money, materials, goodwill, prestige and political capital in this venture. His overriding objective that Iran can never have a nuclear weapon is a righteous one. However, apparently, we are still a long way from a final settlement that the US and its allies in this war can live with. It is crucial that we attain our objectives. This will likely be our one and only chance to resolve this issue. Trump will not be president forever, and there are no assurances that his successor(s) will have the nerve, the fortitude and the domestic and worldwide support that Trump presently has to see this through.

Due to the foregoing, I would characterize this as merely the first step toward a lasting peace agreement, nothing more. That’s fine as far as it goes, but there is still much to do. The situation is very fluid. By the time you read this it may very well have changed.

Due to the impending midterm elections, I believe these negotiations need to show tangible results quickly. I further believe that the short-term key is the reopening of the Hormuz Strait. That will lead to the free flow of energy and a reduction of the cost to businesses and consumers alike. The price of energy affects the cost of all goods and services. Remember history has demonstrated repeatedly that the number one issue for voters in every election is the economy.

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