Uncertain Deal—And Iran Certainly Enters Its Period of Maximum Leverage

Escalation Trap This Week: Staying Ahead of the Risks that Matter

Despite the headlines, this deal remains highly uncertain.

President Trump announced that a memorandum of understanding would be signed Friday in Geneva. Initial reports suggested the agreement would reopen Hormuz permanently and begin sixty days of negotiations between Washington and Tehran.

Within hours, however, Iran’s view of the agreement is very different.

According to Iran’s Deputy Foreign Minister – the most senior to comment on the Friday signing after Trump’s announcement -- Tehran expects three conditions before any long-term process begins: immediate release of $12 billion in frozen assets, an immediate and complete end to Israeli military operations in Lebanon, and significant movement toward reducing the American military presence in the Gulf. He also said Iran begins charging fees in 60 days.

Those demands tell us something important. Negotiations are no longer occurring because Iran fears defeat. They are occurring because Tehran believes time increasingly favors Iran. Iran is no longer negotiating to stop losing. It is negotiating to win more.

States gaining leverage rarely hurry to end wars.

Below I explain:

• why this agreement may actually strengthen Iran’s leverage rather than reduce it;

• why August could become the most dangerous month for the global economy;

• why Iran’s growing leverage may eventually weaken the American military position in the Gulf and set the stage for Iranian nuclear weapons; and

• the three indicators on whether the war is ending or moving to a new phase on ongoing violence.

These are the risks that matter now.