US and Iran negotiate fragile peace deal
Sydney (15 June) Update: New comments from Israeli Defence Minister
The US and Iran will halt all military operations around the Strait of Hormuz on 19 June – paving the way for increased Persian Gulf oil exports – under the terms of an initial peace agreement.
“We are pleased to announce that the Peace Deal between the United States of America and [the] Islamic Republic of Iran has been [reached],” Pakistani Prime Minister Shehbaz Sharif said on 15 June. The deal covers military operations on all fronts, including in Lebanon, Sharif added.
But the Israeli Government plans to occupy parts of Lebanon beyond 19 June, undermining the peace agreement. The Israeli Defence Force will remain in security zones in Lebanon, Syria, and Gaza, without any time limit, Israeli Defence Minister Israel Katz told Israeli news outlets.
Oil may not immediately flow out of the Persian Gulf when the US and Iran halt military operations on 19 June. Iran will initially reopen the Strait of Hormuz for mine removal purposes, US President Donald Trump said.
The Australian Government has also indicated that the US-Iran Peace Deal will not immediately end maritime disruptions. “We are pleased the agreement between the US and Iran includes steps towards reopening the Strait of Hormuz and the restoration of freedom of navigation,” Australian Prime Minister Anthony Albanese and Foreign Affairs Minister Penny Wong said.
“While full recovery will take time, restoring this vital trade corridor is essential to easing pressure on energy prices and economies,” they added.
Brent crude oil futures prices fell to their lowest level since 4 March – days after the US-Israeli war in Iran began – soon after the US and Pakistan announced the deal. Brent crude oil traded at $83.25/barrel on 15 June, up from $72.87/barrel before the war began.
Brent crude price declines, linked to reported progress towards a Peace Deal, pushed down Australian fuel prices over the week to 10 June, data from the Australian Competition & Consumer Commission (ACCC) show.
Retail diesel and petrol prices fell across every Australian state and territorial capital over that period, ACCC data show. Retail petrol costs have also dropped below pre-Iran war levels in six of Australia’s eight territorial capitals, but remain elevated in Perth and Hobart, according to the ACCC.
By Avinash Govind