The US-Iran deal and the geopolitical bargains it unleashed

The guns have gradually fallen silent and the intensity of fighting in the Middle East has subsided in recent weeks. Although the dust has settled for the time being, peace remains elusive in a region where the roots of conflict are both longstanding and complex.

Pakistan Prime Minister Shehbaz Sharif's recent announcement of signing a memorandum of understanding (MoU) between the United States and Iran marked a temporary end to nearly 100 days of conflict. The agreement brought an immediate halt to hostilities across multiple fronts, including naval blockades against Iran and attacks linked to the wider regional confrontation. It also removed restrictions on navigation through the Strait of Hormuz and opened the door for further negotiations despite deep mistrust between the parties.

Yet the agreement has not resolved all underlying disputes. Israel has already declared that it is not a party to the deal. Prime Minister Benjamin Netanyahu has stated that Israeli forces will continue to occupy territories under Israeli control in Syria, Gaza and Lebanon. One of the key expectations of the agreement—the cessation of hostilities against Lebanon—has already come under strain as Israeli attacks in southern Lebanon have reportedly continued at irregular intervals.

Israeli Defence Minister Israel Katz reinforced this position, stating that Israeli forces would remain in security zones in Lebanon, Syria and Gaza for an unlimited period in order to protect Israeli communities from militant threats. Not surprisingly, questions have emerged regarding the future of Iran's nuclear programme, sanctions relief, Iranian energy exports, Israel's territorial posture, the status of the Strait of Hormuz and the fate of Iran's regional allies, including Hezbollah.

The agreement has nevertheless brought immediate relief to both Washington and Tehran. The more difficult question is who gained the greater advantage.

As negotiations continued in Geneva, reactions remained mixed. European leaders largely welcomed the agreement as oil prices eased and financial markets responded positively. For Europe, stability in energy markets and freedom of navigation through the Strait of Hormuz remain critical economic interests.

For President Donald Trump, the conflict had become increasingly costly both politically and economically. Rising energy prices, declining market confidence and growing public concern added to domestic pressure for a diplomatic settlement. Critics argued that the war had failed to produce the strategic outcomes initially promised by Washington. The agreement therefore provided an exit from a conflict that was becoming increasingly difficult to sustain.

The deal has also generated debate within Israel. Opposition leader Yair Golan criticised Netanyahu for failing to prevent an agreement that, in his view, diluted Israel's military gains. On social media and in political circles, critics have questioned whether the agreement adequately protects Israel's long-term security interests.

Some Israeli political groups, particularly on the far right, continue to advocate a vision of a "Greater Israel" extending beyond the country's current borders. Within this perspective, military operations in Gaza, southern Lebanon and parts of Syria are viewed as components of a broader strategic project. Some analysts argue that confrontation with Iran formed part of that wider vision and that the agreement has, at least temporarily, constrained its implementation.

Significantly, the MoU does not address two of the major objectives repeatedly cited during the conflict: ending Iran's nuclear programme and pursuing regime change in Tehran. Neither objective appears in the agreement. As a result, many observers see the outcome as falling short of the ambitions articulated by some Israeli and American policymakers at the outset of the war.

Indeed, many analysts contend that Iran emerged from the negotiations in a relatively favourable position. The agreement reportedly facilitates the release of frozen Iranian assets and eases economic pressure on Tehran. More importantly, Iran retains its two principal sources of leverage: its influence over the Strait of Hormuz and its nuclear programme, both of which remain subjects for future negotiations rather than immediate concessions.

There are already concrete temporary and conditional measures being implemented to ease restrictions on Iranian crude oil and petroleum products exports to India, China, Japan, South Korea, and Turkiye for 60 days while negotiations continue.

The agreement also avoids imposing direct measures against Hezbollah or Hamas, another outcome viewed by some analysts as advantageous to Tehran. At the same time, freedom of navigation through the Strait of Hormuz is expected to benefit the global economy by stabilising energy supplies and reducing uncertainty in international markets. The US has also agreed to lift sanctions on Iranian oil exports to other countries.

For Lebanon, the deal offers the prospect—though not the guarantee—of reduced hostilities and greater respect for its sovereignty and territorial integrity. Whether this promise materialises will depend largely on the behaviour of the parties involved in the months ahead.

Iran, however, paid a heavy price during the conflict. The country reportedly suffered more than a thousand deaths, thousands of injuries, significant infrastructure damage and the loss of several senior leaders, including Supreme Leader Ayatollah Ali Khamenei. Yet despite these losses, the Iranian state and society demonstrated a remarkable degree of resilience. Rather than weakening national resolve, the conflict appears to have strengthened a sense of unity in the face of external pressure.

Ultimately, the agreement reflects less a comprehensive peace settlement than a pragmatic bargain among adversaries. Washington has adopted a strategy of conditional sanctions relief that is attached to Iranian commitments including that of oil exports. The deal has halted a costly conflict, eased pressure on global energy markets and created space for diplomacy. But the fundamental disputes that fuel instability in the Middle East remain unresolved. The war may have ended for now, but the strategic competition that produced it is far from over.

Sketch: TBS

Mustafa Kamal Rusho, a retired Brigadier General, is a Research Director at the Osmani Centre for Peace and Security Studies.

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of The Business Standard.