J.D. Vance can sell the new memorandum of understanding (MOU) between the U.S. and Iran as hard as he wants, but it’s difficult to avoid two obvious conclusions: the U.S. failed to achieve any of its major goals in the war it launched alongside Israel in February, and the agreement winding down that conflict appears quite favorable to Iran. Case in point: one of the big “victories” Vance and the Trump administration keep touting — Iran reopening the Strait of Hormuz — was of course the status quo before President Trump and Prime Minister Netanyahu wreaked havoc on the global economy while inadvertently installing an even more hardline regime than the one they decapitated.

But most people affected by this shambolic military operation care less about political wins and more about rising prices, and when they might come down again. Iran’s near-closure of the Strait and bombing of many of its Middle Eastern adversaries had a profound negative effect on far more than just oil production, hitting countries across the world — including the U.S. — in sometimes unexpected ways. The question now is how quickly the flow of goods can snap back to something approaching normal. I spoke with Gregory Brew, a senior analyst on Iran and oil at the Eurasia Group, to get some answers.

How are you thinking about this deal in practical terms, based on what we know? In my view, an agreement at this stage really needs to do two things: end the war and reopen the Strait of Hormuz. Based on the details that have been made available, it looks as though this MOU does that. I think it’s notable that both the Americans and the Iranians are framing this as an end to the war, but not to the U.S.-Iran confrontation that’s going to continue. They’ll still be hostile toward one another, but overt hostilities will be coming to an end as a result of this deal. That’s the first piece.

The second piece is reopening the Strait of Hormuz. It has long been my understanding that this would require a degree of financial incentives for Iran, to compel their compliance in allowing it to reopen. And the MOU appears to do precisely that. Iran is getting some amount of its funds unfrozen in overseas accounts; it’s unclear exactly how much, but it’s somewhere between $10 and $20 billion. We’ll probably never know for sure. Also, it was long my suspicion, but has been recently confirmed, that the United States would likely give Iran a sanctions waiver, allowing it to export oil at market prices for a period of time. Finally, Iran is expecting the U.S. to end its blockade that has been in place since April, and just today it was reported that several Iranian oil tankers have exited the Persian Gulf and are now carrying their oil east toward China. That’s the most important part of this agreement: Iran is receiving some economic incentives. But the more tangible benefit that Iran has drawn is what it demonstrated during the war: an ability to close the Strait and keep it closed even in the face of withering aerial bombardment by both the US and Israel. That’s something that no one will be able to take away from them.

Everything else substantive — Iran’s nuclear program, the possibility of broader sanctions relief, a conclusion to the conflict in Lebanon — is likely to be mentioned in the MOU but not settled. That will........

© Daily Intelligencer