Iran and the U.S. Make a Deal. What Now?

SPEAKER_1 (0:00)

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Luke Vargas (0:33)

The US and Iran sign a peace deal. We'll get the latest on the fate of Iran's nuclear program, what Israel makes of the deal, and how the agreement could turbocharge Tehran's oil revenues.

Rebecca Feng (0:46)

Iran's oil facilities haven't been damaged very, very dramatically, and also Iran is a country that can actually bring back oil production fairly quickly.

Luke Vargas (0:55)

It's Thursday, June 18th. I'm Luke Vargas for The Wall Street Journal, and here is the AM Edition of What's News, the top headlines and business stories moving your world today.

President Trump is back in the US following a surprise move to ink an agreement to end the Iran War over dinner last night at the G7 Summit in France. Journal National Security reporter Alex Ward has been reporting from the summit, and is now in Switzerland, where negotiations are set to continue. Alex, what is the current situation? It seems like all of a sudden we went from, hey, we're getting a big signing on Friday, and then smash cut to, well, the agreement's actually now been signed by President Trump, and he's already back in Washington. Is this thing now in effect?

Alex Ward (1:43)

Boy, what a surprise this was. Yes, the deal is in effect as of Wednesday. President Trump surprisingly signed the deal while having dinner in Versailles, and Iran says that their president has signed it as well, and so this deal is now operational. That kicks off 60 days of discussion over the nuclear file, right? Because when we talk about the Iran deal, I think we need to separate two things. We need to say this memorandum of understanding is really an agreement to reopen the Strait of Hormuz. That is really what this is about. It does set up larger negotiations over the nuclear file. And that's what's going to be happening now that this deal has been signed this weekend. You're going to see Vice President JD Vance, and the Iran envoys Jared Kushner and Steve Wittkopf, they all are expected to arrive in Lucerne to start those negotiations. And so the Iranians will be coming as well, and some mediators from the countries of Pakistan and Qatar.

Luke Vargas (2:38)

Starting with the Strait of Hormuz, are we seeing movement there? What should we be expecting in the next few hours and days?

Alex Ward (2:44)

We've already been seeing some movement, but this is going to be a long-term process. As much as President Trump said it will be fully reopened by Friday, that's just not how commercial shipping works. There also is the small matter of that there are mines in the strategic waterway, through which about a fifth of the world's oil supply flows. So it's going to take a few weeks, at least, perhaps more to get fully up and running. Now, let's also talk about the Iranian side of this equation, which is, as part of this, as they call it, a memorandum of understanding. Basically, at the heart of it is a trade. Iran reopens the Strait of Hormuz, the US lifts the blockade, and crucially allows Iran to sell oil again.

It is immediate upon the signing of the deal, which allows Iran to bring in revenue. So in effect, the Trump administration has offered Iran the incentive of making money in order to reopen the Strait of Hormuz. So that's where we are today.

Luke Vargas (3:40)

Okay, and we would be expecting, I guess, Iranian oil export vessels to be passing through the Straits, along with all those other vessels that have been stranded there. So that's something visual, frankly, that we're going to get pretty soon, it sounds like.

Alex Ward (3:54)

Yes. Now again, the volume of it is unclear, right? If you're a shipping company, you're probably worried about the mines, you're probably worried about the viability of this, right? Do you really trust Iran? Are they going to start shooting at you again? Because we should know there are members of the Iranian regime that aren't happy with this memorandum, particularly members of the Islamic Revolutionary Guard Corps, the very powerful militia and economic force inside Iran. So will they try to play spoiler? You can also imagine that if, say, the conflict between Israel and Hezbollah were to pick up, you could imagine some leaders in Iran go, this deal is already void, let's reclose the strait. So we'll see little advancements. And the way the US has designed this memorandum, they describe it as, the more Iran abides by it, the more economic relief they get.