Yesterday, leaders from the United States and Iran confirmed a new peace agreement had been reached with the help of mediators from Pakistan. Though specific details of the peace deal remained scarce, some provisions are now publicly known. Those include the reopening of the Strait of Hormuz, the ending of the U.S. naval blockade of Iranian ports, and the cessation of hostilities in Lebanon.

Israeli Prime Minister Benjamin Netanyahu has yet to comment on the agreement, but many members of his own cabinet were quick to say Israel was not a party to the deal and therefore is not bound by the terms of it. 

The new ceasefire arrangement will aim to end a second round of fighting between the U.S., Israel, and Iran, which broke out after the first ceasefire agreement fell apart. The potential for the new peace plan to unravel remains ever present, and indeed, before the deal has even been formally signed, several voices in Iran and Israel are already calling for a return to hostilities. But for the moment, the new ceasefire remains in place, and world markets reacted positively to the news on Sunday…

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Each country involved in the deal will face challenges to keep the ceasefire intact. In Iran, supporters of the Iranian Revolutionary Guard Corps took to social media to threaten further attacks against Israel if the fighting in Lebanon is not halted. Several members of Prime Minister Netanyahu’s own party, as well as opposition leaders in Israel, criticized the deal with Iran, saying Israel will continue to attack Hezbollah in Lebanon despite the terms of the new deal. In the U.S., political allies of President Trump hailed the deal as a victory while his critics called it a defeat. 

Pakistan’s role as a mediator between Iran and the U.S. has increased the influence of Pakistani voices with the Trump Administration, which was likely the main goal for Field Marshall Munir, the Chief of Staff of Pakistan’s Army. The army is the most powerful institution in Pakistan, but they face a much larger potential enemy in India, which is why General Munir likely wants to court favor with the U.S. The U.S. has a lot of influence in India, and Pakistan seeks to leverage that to their own advantage. 

Major international oil executives, including the CEOs of Chevron and Shell, had warned that strategic stockpiles of petroleum were reaching historically low levels and that if the war continued, two hundred dollars a barrel oil would be a real possibility. Since February, the U.S. and European countries have been tapping their petroleum reserves to keep prices down, but the oil executives cited low reserve levels as proof that practice could not continue much longer.

Even if the new peace agreement between the U.S. and Iran holds, the last few months of conflict will likely have a lasting impact on the geopolitics of the Middle East. Relations between gulf nations and Iran have changed, and the Iranian regime, though battered, has survived. Iran’s nuclear program does not appear to have been part of the new ceasefire deal.

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