US and Iran agree to end the war, but the hard part isn’t over

After months of war that sent oil prices soaring and rattled economies around the world, the United States and Iran have agreed to a deal to stop fighting. Markets reacted almost instantly: oil prices dropped more than 3%, and stocks in Japan jumped. World leaders, including the UN chief, have welcomed the news. But a closer look shows this deal solver the urgent problems without touching the deeper ones that started the war in the first place.

What’s in the deal

The agreement extends a ceasefire that’s been in place since April for another 60 days. During that time, two big things happen: the US will lift its naval blockade on Iran’s ports within 30 days, and Iran will stop blocking the Strait of Hormuz, a narrow waterway that about 20% of the world’s oil and gas passes through. That’s a huge deal for global energy prices, since the blockade and the closure of the strait are a major reason fuel costs have been so high.

Iranian media also say the deal includes releasing billions of dollars in frozen Iranian assets over the next two months, though the exact numbers differ depending on the source, and the full agreement hasn’t been made public yet. It’s expected to be officially signed this Friday in Geneva.

Why both sides wanted this

Both countries had strong reasons to want a way out. In the US, rising fuel prices have been pushing inflation to its highest level in three years, putting pressure on Trump. Meanwhile, Iran’s economy has been getting crushed by sanctions and the blockade. Neither side could afford to keep going much longer.

That’s part of why both sides are now describing this as a win. Iran’s military leadership is calling it a victory for Tehran, while Trump posted excitedly on social media, “Let the oil flow!”, on his 80th birthday. But former US officials warn not to take either side’s spin too seriously. One former State Department official said everyone involved is “frantically trying to spin the text” to look like the winner, while another accused the Trump administration of using vague wording, especially around the frozen assets, to make things sound more resolved than they actually are.

The big question still unanswered

Here’s the catch: this deal doesn’t actually settle the issue that arguably caused the war in the first place, which is Iran’s nuclear program. Trump told the New York Times he wants Iran to agree to stop enriching uranium for up to 20 years (he hinted he might settle for 15), but that’s still being negotiated. Iran also has a stockpile of highly enriched uranium that the US believes it buried during the strikes, and what happens to that material is still unclear.

The 60-day window everyone keeps mentioning isn’t the end of the process. It’s the start of the real negotiations. And those talks will also need to deal with things this agreement doesn’t touch, like Iran’s conventional weapons and its support for armed groups across the region. How shaky this all still is became obvious just hours before the announcement: Trump reportedly spent Sunday morning furious at Israel’s prime minister over an Israeli strike on Beirut that almost blew up the whole deal, with Iran threatening retaliation right up until Pakistan stepped in and announced the agreement anyway.

Even the part of the deal that seems most straightforward, reopening the Strait of Hormuz, will take time to actually play out. Oil prices dropped fast on the news, but shipping companies are expected to wait and see if the ceasefire actually holds before sending tankers back through. The UAE’s state oil company has said full oil flow might not return to normal until early next year. On top of that, countries have already used up more than a third of the emergency oil reserves they released back in March, and refilling those will take months no matter what happens with Iran.

Bottom line

This is a real and welcome step after a war that’s cost thousands of lives and shaken the global economy. But it’s best understood as a pause that buys time for the harder conversations about Iran’s nuclear program, its weapons, and its allies in the region, rather than a deal that has actually resolved them. The next 60 days will show whether this turns into lasting peace or just a longer ceasefire.