Iran and the US near a memorandum, Hormuz to reopen

President Donald Trump announced on Tuesday from the White House that a memorandum of understanding between the United States and the Islamic Republic of Iran on a permanent ceasefire and the reopening of the Strait of Hormuz is close to finalisation, following more than two months of mediation by the Sultanate of Oman and a fourth round of technical talks held in Muscat on May 11. The agreement, which Trump said should be signed in the coming weeks, foresees a temporary moratorium on Iranian uranium enrichment above the 3.67 percent level, a gradual lifting of select sanctions, and a phased reopening of maritime trade routes in the Persian Gulf.

For Serbia, which kept a neutral position during the war between the US-Israel and Iran that began on February 28 and evacuated 11 nationals from the region, reaching the agreement carries a concrete economic implication via the oil price. Brent fell 3.4 percent on Tuesday after Trump’s statement to 73 dollars a barrel, the lowest in two weeks. A lower oil price directly eases Serbia’s budget, which is weighed down by oil imports of roughly 2.3 billion euros a year, and household spending through fuel prices, where the price of a litre of diesel passed 195 dinars on May 22, an all-time high.

Iranian Foreign Minister Abbas Araghchi confirmed in a statement to state news agency IRNA that talks are “progressing in a good direction,” but said Tehran maintains the position that any deal must include the cessation of fighting on all fronts, including continued talks between Israel and Hezbollah in Lebanon despite the ceasefire reached between the Israeli and Lebanese governments. Syria’s government under Ahmed al-Sharaa, which kept a neutral position throughout the conflict and absorbed consequences of Israeli air defences intercepting Iranian missiles, has supported the resumption of talks and the reopening of the strait.

Technical issues around enrichment oversight

The memorandum of understanding, according to a summary circulated to UN Security Council members on Tuesday, contains three key elements: a moratorium on uranium enrichment above the level needed for civilian use, the placement of permanent International Atomic Energy Agency inspectors at the Natanz and Fordow sites, and the opening of a working group on the phased lifting of secondary sanctions on Iranian banks. IAEA Director General Rafael Grossi said in Vienna that “the technical framework under discussion is realistic and can be implemented quickly.”

Iran and Oman are jointly coordinating preparation of a new management system for the Strait of Hormuz, through which roughly 20 percent of the world’s oil exports pass daily. Muscat has proposed a tripartite oversight formula, with joint Iran-Oman-Saudi control points, a structure that bypasses direct US-Iran interaction in the zone and reduces the risk of accidental incidents. British analyst David Piket of the Brookings Institution said in a short note that “the Omani model is the only one that can work in practice, because it leaves room for political compromise at a moment when neither side is seeking open conflict.”

Brussels pleased, Tel Aviv guarded

Brussels, through EU High Representative Kaja Kallas, welcomed the progress, with the formulation that “every step towards a diplomatic solution is in the interest of European security.” Trade Commissioner Maros Sefcovic signalled that the EU could, in the next quarter, consider partial easing of restrictions on Iranian economic activity in the Union, but on the condition of full compliance with the enrichment moratorium. Paris and Berlin, as members of the E3 group that has historically led negotiations with Iran, backed the language of the memorandum.

Israeli Prime Minister Benjamin Netanyahu reacted with reservations, telling the Knesset that Israel “will not accept any agreement that leaves Iran the capacity to restart its nuclear programme in the medium term.” Tel Aviv insists the memorandum must contain clauses on the permanent dismantling of centrifuges, which Tehran refuses. According to the British daily The Financial Times, this gap is the main obstacle to signing, although Trump is pressing both sides to find a compromise before the end of June.

The next concrete date is June 9

The next concrete date is the IAEA board session in Vienna on June 9, where Grossi will present the technical framework’s details, with signature potentially following in Muscat in mid-June. According to sources at the Palace of Serbia, Belgrade will, at the EU-Western Balkans summit in Tivat on June 5, back language about returning to the diplomatic channel as the only solution, the line Serbia will also bring to the UN General Assembly in September.

What do you think, how realistic is signing by the end of June, and what would a lasting peace in the Persian Gulf mean for the cost of energy in Serbia?