Finance Bureau Newsletter: The Iran Deal

The Iran Deal

The agreement announced between the United States and Iran this week will extend their ceasefire by 60 days and reopen the Strait of Hormuz — a first step toward ending a global energy crisis that has driven inflation to its highest levels since the early 1980s.

The core terms are significant but conditional. Iran commits to demining the Strait and allowing free transit without tolls. The United States lifts its naval blockade on Iranian ports and grants Iran a waiver to sell oil during the 60-day period.

Broader sanctions relief, including the unfreezing of Iranian assets held abroad, is phased and conditional on progress in nuclear negotiations — a structure the US describes as “performance-based.”

Iran reaffirms it will not develop nuclear weapons, and the two sides will negotiate under IAEA supervision on the disposal of Iran’s stockpile of enriched uranium, including 440 kilograms enriched to near-weapons-grade levels.

The economic effects of the deal are already being felt. Oil fell on the announcement, with Brent dropping several dollars per barrel in early trading. If oil prices fall 15 to 20% over the coming weeks as Hormuz reopens, the entire inflation picture for the second half of 2026 changes. The Federal Reserve, which had been moving toward a rate hike under the weight of May’s 4.2% CPI reading, now has reason to pause.

The diesel crunch that Goldman Sachs had warned would reach critical levels by August becomes far less likely.

There are important caveats however. Sixty days isn’t all that long and nuclear negotiations are notoriously complex. Israel has resisted aspects of the agreement, particularly provisions linked to Lebanon.

Ships and insurance markets will take weeks to trust the Hormuz corridor again. And Iran has shown that geographic control of a critical shipping lane is perhaps as effective a deterrent as a nuclear programme — many other countries will have noted that with great interest.

About michelleclarke2015

Life event that changes all: Horse riding accident in Zimbabwe in 1993, a fractured skull et al including bipolar anxiety, chronic fatigue …. co-morbidities (Nietzche 'He who has the reason why can deal with any how' details my health history from 1993 to date). 17th 2017 August operation for breast cancer (no indications just an appointment came from BreastCheck through the Post). Trinity College Dublin Business Economics and Social Studies (but no degree) 1997-2003; UCD 1997/1998 night classes) essays, projects, writings. Trinity Horizon Programme 1997/98 (Centre for Women Studies Trinity College Dublin/St. Patrick's Foundation (Professor McKeon) EU Horizon funded: research study of 15 women (I was one of this group and it became the cornerstone of my journey to now 2017) over 9 mth period diagnosed with depression and their reintegration into society, with special emphasis on work, arts, further education; Notes from time at Trinity Horizon Project 1997/98; Articles written for Irishhealth.com 2003/2004; St Patricks Foundation monthly lecture notes for a specific period in time; Selection of Poetry including poems written by people I know; Quotations 1998-2017; other writings mainly with theme of social justice under the heading Citizen Journalism Ireland. Letters written to friends about life in Zimbabwe; Family history including Michael Comyn KC, my grandfather, my grandmother's family, the O'Donnellan ffrench Blake-Forsters; Moral wrong: An acrimonious divorce but the real injustice was the Catholic Church granting an annulment – you can read it and make your own judgment, I have mine. Topics I have written about include annual Brain Awareness week, Mashonaland Irish Associataion in Zimbabwe, Suicide (a life sentence to those left behind); Nostalgia: Tara Hill, Co. Meath.

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