US-Iran Peace Deal Issues: Strait Reopening Priority, Tehran’s Leverage Point

Reopening the Strait of Hormuz

The closure of the Strait of Hormuz by Iran has led to an unprecedented oil supply shock, affecting around a fifth of global oil and liquefied natural gas shipments. This situation is driving up fuel, food, and fertilizer prices worldwide. Washington’s top priority is reopening this crucial strait, which remains Tehran’s main point of leverage. However, the process could take time as many vessels are currently stuck in the Gulf, and Iran has reportedly laid some sea mines that may be difficult to locate.

US-Iran Port Blockade

The US blockade on Iranian ports is significantly impacting Iran’s exports and state revenue. Lifting this blockade is one of Tehran’s main goals. The US maintains its blockade despite acknowledging that it could harm Iran’s economy, which has been under sanctions for years, contributing to nationwide unrest in January.

Nuclear Issue

The United States believes Iran wants to build a nuclear bomb, while Iran insists its atomic program is solely for peaceful purposes. The focus of negotiations revolves around Iran’s enrichment of uranium, which can be used for both power generation and potential weapons material. Iran has enriched some uranium to 60% purity and other stocks to 20%, 5%, and 2%. It might agree to dilute part of its highly enriched uranium in a friendly country into uranium enriched to 5% purity before returning it, according to Iranian sources.

Ballistic Missiles

A key demand from the US before the war was that Iran limit the range of its ballistic missiles so they could not reach Israel. Iran has consistently maintained that its right to conventional weapons is non-negotiable and that it still possesses a large arsenal. This issue remains unresolved, with both sides insisting on their respective positions.

Sanctions and Frozen Assets

Iran’s economy has been severely affected by sanctions for years, leading to widespread discontent among the population in January. Tehran urgently needs these sanctions lifted and for tens of billions of dollars in frozen Iranian oil revenues released from foreign banks. The US has resisted this demand, with President Trump criticizing former President Obama for returning some assets to Iran under a 2015 nuclear deal.

Lebanon

Iran has repeatedly emphasized that any US-Iran agreement must include provisions related to the Israeli war against its main ally, Hezbollah, in Lebanon. Israel and Hezbollah have accused each other of repeated violations, while Israel continues to escalate its military campaign in southern Lebanon. Any agreement limiting Israel’s ability to act in Lebanon would face strong opposition from Tel Aviv.