US-Iran Peace Deal Potential as Early as Sunday, Hormuz Key
The United States and Iran are reportedly likely to sign a peace deal as early as Sunday, after Iranian state media reported that a draft agreement has included several key points. Key points in the draft include a US commitment to lifting sanctions on Iranian oil and Tehran's promise to reopen the Strait of Hormuz within 30 days.
According to a report by the Mehr News Agency, the 14-point agreement document stipulates that final negotiations will not begin until several key conditions are met. These conditions include the release of half of Iran's frozen funds, the suspension of oil sanctions, and the lifting of the naval blockade.
The report also states that all American troops must withdraw from Iran. The US and its allies are also reportedly being asked to submit a reconstruction plan for Iran worth at least US$300 billion as part of post-conflict recovery efforts.
News of the potential signing of the agreement in Switzerland comes amid preparations for the G7 summit, which will take place on June 15-17 in Evian, in the French Alps. This momentum has made the US-Iran peace agreement a major focus for global markets, particularly as the conflict has impacted energy flows, oil prices, inflation, and risk asset sentiment.
However, the certainty of an agreement remains uncertain. Iran's official news agency, IRNA, quoted a spokesman for the Iranian Foreign Ministry as saying that the time and location of the meeting were still mere media speculation. An official announcement would only be made after the two countries reached a final conclusion.
In my opinion, the potential for a US-Iran peace agreement could be a major catalyst for global markets if realized. Reopening the Strait of Hormuz has the potential to lower risk premiums in the oil market, ease energy inflationary pressures, and improve investor appetite for risk assets. However, as long as key conditions such as the lifting of oil sanctions, the release of frozen funds, and reconstruction issues have not been officially agreed upon, the market is likely to remain cautious. (gn)
Source: Newsmaker.id
