A new episode of the Money Axis podcast discussed the emerging U.S.-Iran agreement, which is still not fully defined. What is already known, according to the discussion, is that the American naval blockade on Iran is expected to end and that passage through the Strait of Hormuz may reopen, at least as both sides hope.
However, the most sensitive issues, Iran’s nuclear program, its ballistic missile capability, and funding for proxies such as Hezbollah, were not addressed in the first round and are supposed to come up during the 60-day negotiation window. Economically, the effects are expected to take time to filter through. Economist commentator Doron Paskin said oil prices fell after the announcements, but shipping faces deeper problems tied to insurance and trust, and traffic in Hormuz will not normalize quickly. He added that about 600 vessels are currently stuck in the Gulf.
The agreement is also seen as potentially allowing Iran to restore oil exports to prewar levels. In May, exports reportedly fell below 300,000 barrels a day because of the blockade, after periods when they exceeded 1 million barrels a day, costing the regime about $80 million daily, or roughly $2.5 billion a month. Iranian reports also say the deal could bring foreign currency into the country, but only if the sides reach understandings on the core issues within the 60 days.
Paskin said a full nuclear deal cannot realistically be completed in that timeframe. He also argued that Iran entered the talks with a clear goal, to buy time and money, and that one central dispute concerns the release of $25 billion in frozen Iranian funds. He said no mechanism has been set for how that money would be distributed, but it could significantly strengthen the regime. For the U.S., he noted, time also matters because the war reduced strategic oil reserves by nearly 50%, leaving them at a low point. As for Israel, Paskin said Iran is weaker than before and that the sums now under discussion will not save its economy, even though Israel does not welcome any deal that injects money into the regime.
