The step back finally arrived. In a climate of extreme international tension, Donald Trump has announced the suspension of the massive bombing against the Islamic Republic of Iran, originally scheduled for tonight.
The decision came following “frantic diplomatic activity” and sets the stage for what could be a historic deal for peace in the region.
The conditions: it all depends on Hormuz
Through a statement released on his social network, Truth, Donald Trump clarified that the ceasefire is not unconditional. The turning point lies in freedom of navigation: “I agree to suspend bombing for a period of two weeks provided that Iran agrees to the complete, immediate and safe opening of the Strait of Hormuz.”
The role of Pakistan: truce also in Lebanon
The President revealed that the decision came after crucial talks with Pakistani Prime Minister Shehbaz Sharif and Field Marshal Asim Munir, who acted as mediators explicitly asking to stop the “destructive force” already being sent. “I am pleased to announce that the Islamic Republic of Iran and the United States, together with their allies, have agreed to an immediate ceasefire everywhere, including Lebanon and elsewhere,” the Pakistani prime minister said on X.
The ten points of the agreement
According to Trump, diplomacy has made great strides. Iran would present a 10-point proposal, judged by the White House as a “concrete basis” for negotiations. The United States and Iran have already reached an agreement on almost all of the past points of contention. Israel is also part of the ceasefire and has agreed to suspend military operations while negotiations continue. The New York Times underlines the decisive role of Beijing, which reportedly urged the Iranian Supreme Leader, Mojtaba Khamenei, to show flexibility to avoid total escalation.
The effects and next steps
The effect of the announcement was immediate on global markets. Oil prices collapsed with the ceasefire. The WTI lost up to 18%, falling well below 100 dollars a barrel to 93.03 dollars, reacting with relief at the removal of the specter of a conflict that would have paralyzed global energy supplies. The price of gas also collapses at the start of the agreement between the US and Iran for a two-week truce, conditional on the reopening of the Strait of Hormuz. TTF contracts in Amsterdam, the reference market, fell by over 19% to 43 euros per megawatt hour. The spread between BTP and Bund fell at the start of the day with the temporary truce between the United States and Iran. The differential drops to 73 points from 88.3 points at yesterday’s close. There was also a sharp drop in yields. The Italian ten-year bond goes from 3.96% to 3.63%.
The next two weeks will be decisive. As reported by Axios, the ceasefire will effectively become operational as soon as Iran ensures safe transit through the Strait of Hormuz. If Friday’s talks in Islamabad yield a positive outcome, the Middle East could find itself facing a new, unexpected paradigm of stability.