What do Iran and the US stand to gain from their deal? Here’s what to know

Cairo: The interim deal reached by the United States and Iran to end their war will reopen the Strait of Hormuz and bring the two adversaries back to the negotiating table over Tehran’s nuclear programme. It will also give Iran an immediate benefit, allowing it to sell its oil freely again, according to details released by both countries.

Besides the new oil revenue for Iran, the two sides are more or less back where they were 3½ months ago - before Israel and the US on Feb. 28 launched their war on Iran, which has left thousands dead across the region, triggered a global energy crisis and shaken the American economy.

Iran and the US will enter a 60-day period of negotiations, and hanging over them will be the question of whether US President Donald Trump can wrest a better deal than the 2015 nuclear accord he scuttled eight years ago.

Here’s what to know based on details released by US officials and Iranian state media:

The interim deal would get the oil flowing again

Trump and Vice-President JD Vance signed the agreement digitally over the weekend and Trump signed a physical copy Wednesday while dining with French President Emmanuel Macron in the Palace of Versailles.

In Tehran, a stone-faced President Masoud Pezeshkian signed the deal on behalf of Iran, according to the state-run IRNA news agency, which posted an image of him holding up the deal with his signature and Trump’s.

Under the agreement, the Strait of Hormuz will reopen and the US will lift its blockade of Iranian ports, which should push gas prices down. Passage through the waterway will be toll-free for only 60 days, and the deal doesn’t preclude fees in future, according to US officials who spoke on the condition of anonymity to read details of the draft, which has not yet been officially released by Washington.

Iran’s closure of the strait, through which around a fifth of the world’s traded oil supplies transited toward the open ocean before the war started, proved perhaps its strongest weapon. It drove up global fuel prices, made food and other basics like fertiliser more expensive, and helped push US inflation to 4% ahead of this fall’s midterm elections.

Iran will be able to sell oil freely

The deal immediately waives, but doesn’t eliminate, sanctions that Trump imposed on Iran’s oil exports, allowing it once again sell its crude on the world market and restoring a revenue stream worth billions.

Last year, Iran earned an estimated $45 billion from oil sales. But it had only one major buyer, China, and had to ship its crude through a shadow fleet of tankers to elude sanctions, eating into its profits. Under the blockade since April, its exports have nearly ground to a halt.

With the waiver, Iran will likely be able to find more customers and sell its oil for higher market prices.

Iran got promises for the future

The draft agreement includes language on Iran’s highly enriched uranium, calling for it to be “downblended” to a lower purity under supervision of the International Atomic Energy Agency, without elaborating. But negotiations on the particulars of Tehran’s nuclear program still lie ahead.

Trump withdrew from the previous nuclear deal in 2018, saying it gave a huge windfall to Iran and calling it “the worst deal ever.” But the interim deal outlines even more lucrative incentives for Iran if it reaches a new agreement with the US on its nuclear program.

One is the eventual lifting of all international sanctions, which would seem to go further than the 2015 accord. That agreement lifted sanctions related to Iran’s nuclear programme but kept others in place over what the US alleged were Tehran’s support for terrorism and rights abuses.

The interim pact also promises a $300 billion fund for reconstruction of Iran’s war damage. Vance has said Gulf Arab nations would invest that amount. But Gulf countries would likely be reluctant to help Iran after Iranian attacks in the war destroyed oil facilities and other sites in their territory.

Trump reiterated Wednesday that the US would not contribute and said it was up to other countries if they wanted to invest.

To give a sense of the extraordinary scale of the fund, the World Bank estimates that Syria, after 13 years of destructive civil war, needs $215 billion for reconstruction; the Gaza Strip, largely flattened in two years of war between Israel and Hamas, needs $53 billion.

The deal also promises to unfreeze billions of dollars worth of Iranian assets held abroad during the negotiations under a procedure the two sides will work out, according to the text provided by US officials.

Iran’s missiles and proxies don’t seem to be on the table

The Trump administration said its war aims were to “obliterate” Iran’s missile arsenal, “sever its support” for proxies in the region, “annihilate its navy” and ensure it never acquires a nuclear weapon.

The seven weeks of US-Israeli bombardment are believed to have heavily damaged Iran’s missile arsenal and production facilities as well as other parts of its military. How heavily isn’t known, though, and Iran continued to fire on Israel as recently as last week. Meanwhile, Iran’s ties with its militant proxies - Hezbollah in Lebanon, the Houthis in Yemen and militias in Iraq - appear strong as ever.

Neither the missile issue nor Iran’s support for its allies appears to be on the table in the upcoming negotiations. The interim deal only specifies that the talks will focus on Iran’s nuclear programme.

War in Lebanon could threaten the deal

The deal calls for an end to the war in Lebanon, where Israel has been fighting Hezbollah.

However, Israel and Hezbollah aren’t parties to the agreement. Iran insists Israel must withdraw from the large swath of southern Lebanon it has occupied since March, but the interim deal doesn’t explicitly require that and only affirms a commitment to ensuring Lebanon’s “territorial integrity.”

Israel has vowed to keep its troops in the zone, while Hezbollah says it is committed to resisting Israel “until full withdrawal is achieved.” If fighting spirals, it could derail the US-Iran deal unless the two countries can rein in their respective allies.

US-Israeli ties have been strained

Israel was squeezed out of the negotiations with Iran, and Israelis from across the political spectrum have called the deal a disaster, directing their fury at Prime Minister Benjamin Netanyahu.

Trump, meanwhile, has grown more scathing in his displeasure with Netanyahu, even describing him as “crazy.” During the negotiations with Iran, Trump was furious over Israel’s strikes in Beirut, warning they could jeopardise an agreement.

In France on Tuesday, Trump said at the annual G7 summit that “without the US, there would be no Israel,” and added that Netanyahu “has to be more responsible with respect to Lebanon.”

Netanyahu is left in a precarious situation ahead of national elections later this year. His relationship with Trump may require downscaling a military campaign in Lebanon that is widely popular in Israel.

Meanwhile, Israel’s arch-nemesis, Iran, would emerge from the war seemingly bolder.

The Islamic Republic survived the most serious attempt ever by Israel and the United States to topple it, despite their thundering opening volleys of the war that killed Iran’s supreme leader and other top officials. And Iran demonstrated its ability to retaliate economically by shutting down the strait and striking US Arab allies in the Gulf, giving Tehran confidence that Trump won’t seek a return to war.

Much depends on the final agreement

The 2015 agreement negotiated by the Obama administration severely limited Iran’s nuclear programme for 15 years. During that period, Iran could only enrich uranium to a low level, 3.67%, which is far below the 90% needed for a weapon. It could only stockpile 300 kilograms of the material and had to sharply reduce its centrifuges carrying out enrichment. It was also put under stricter inspections by the UN’s nuclear watchdog agency.

One main criticism was the 15-year time limit, after which opponents said Iran would be able to quickly ramp up its ability to produce a bomb.

A key question now will be whether the US can win stricter limits on Iran’s programme for a longer term. The United States wants Iran to give up or dilute its stockpile of highly enriched uranium, which Iran developed in retaliation after Trump pulled out of the 2015 accord.

Even if Iran agrees to that, it is almost certain to demand the right to rebuild its enrichment programme at lower levels, for what it insists are peaceful purposes.