By Mohamed Atherulla Shariff
The reported US-Iran Memorandum of Understanding (MoU) is still a framework agreement rather than a finalised peace treaty. The broad outline has been announced by both sides, but many technical and political details remain under negotiation.
What has reportedly been agreed upon is an end to direct US-Iran hostilities, reopening of the Strait of Hormuz to commercial shipping, gradual lifting of the US naval blockade on Iran, potential sanctions relief and permission for Iran to resume oil exports and Iranian commitments related to nuclear activities, including limits on enrichment and international verification mechanisms.
Understandably a 60-day period for negotiating a comprehensive final agreement is also part of the MoU.
Economic Impact So Far
Even before final ratification: Iranian oil exports appear to be resuming, tankers have begun moving through previously restricted routes, global oil prices have eased on expectations of increased supply and shipping through Hormuz is gradually normalising.
The current status is best described as a fragile ceasefire and political framework, not a completed peace settlement. The MoU has reduced the immediate risk of a wider US-Iran war and reopened diplomatic channels, but the next 60 days of negotiations will determine whether it becomes a durable agreement or breaks down over issues such as nuclear verification, sanctions, and regional security.
The most important uncertainty at the moment is not Washington or Tehran; it is whether regional actors, especially Israel and armed groups aligned with Iran, will fully adhere to the emerging framework. If Israel indeed rejects a US-Iran framework agreement and signals that it will continue pursuing the weakening or overthrow of the Iranian regime through its own military, intelligence, cyber, and covert means, the consequences could be profound for Israel, Iran, the United States, and the wider Middle East. Recent reports suggest that an apparent gap has emerged between Washington’s desire for a negotiated off-ramp and Israel’s preference for maintaining pressure on Tehran.
The US-Iran framework agreement indicates that Washington’s priority is regional stabilisation, reopening maritime routes, and avoiding a prolonged war. If Israel continues military operations outside that framework, it could find itself increasingly isolated even among allies.
Historically, Israeli military campaigns have depended on US diplomatic cover, military resupply, intelligence cooperation, and veto protection at the UN. A widening gap with Washington could weaken all the four.
Israel has already been fighting on multiple fronts – Gaza, Lebanon, Syria, Yemen, and now Iran. Maintaining a long-term campaign would strain: public finances, military reserves, investor confidence and tourism.
Military history shows that destroying infrastructure is easier than changing regimes. The experiences of the US in Iraq and Afghanistan, and NATO in Libya, demonstrate that regime-change strategies often produce unintended consequences. Iran is a country of nearly 90 million people with a strong national identity and resilient state institutions. Israel may find itself trapped in an endless cycle of strikes and retaliation without achieving its ultimate political objective.
One irony of external military pressure is that it often strengthens regimes. Even Iranians critical of the government may rally behind the state when facing foreign attacks. Analysts note that previous conflicts and sanctions frequently produced nationalist reactions rather than regime collapse.
If Iranian leaders conclude that no amount of negotiation guarantees security, they may become even more determined to preserve or accelerate strategic deterrent capabilities. Ironically, attempts to prevent a future nuclear threat could incentivise Tehran to seek stronger deterrence.
A continued Israeli campaign would likely empower hardliners, marginalise moderates, increase military spending, and reduce prospects for political reform. Instead of weakening the regime, prolonged confrontation could strengthen the most hardline factions.
Impact on the Middle East
A prolonged shadow war would likely spread through Lebanon, Syria, Iraq, Yemen and maritime routes in the Gulf. Iran-aligned groups could resume attacks against Israeli or Western interests.
Recent reporting indicates that several Gulf Arab states are already reassessing their security assumptions and exploring more direct engagement with Tehran. If Israel continues the conflict while Gulf States seek de-escalation, regional diplomacy could increasingly bypass Israel. The idea that the world is moving toward a ‘new world order’ is not far-fetched. However, whether the recent Iran-US-Israel conflict marks the decisive turning point remains open to debate.
The more cautious conclusion is that the war has accelerated trends that were already underway rather than creating an entirely new order.
Since the collapse of the Soviet Union in 1991, the world largely operated under a US-led unipolar system: the United States was the dominant military power, the US dollar was the dominant reserve currency, Washington acted as the principal security guarantor in the Gulf, most regional powers ultimately depended on American military protection and the Gulf monarchies, in particular, relied heavily on US deterrence.
What This War Appears to Have Changed
If the reported ceasefire framework holds, several observations emerge: Iran Survived. The primary objectives often attributed to the US-Israeli campaign – regime change, dismantling Iran’s strategic capabilities, and forcing unconditional surrender – do not appear to have been achieved. Iran remains a functioning state and a major regional actor. This alone enhances Iran’s reputation among many actors in the Global South.
Long before this conflict, powers such as China, India, Russia, BRICS, and regional middle powers were reducing dependence on a single global centre of power. The war reinforces arguments that no single power can dictate outcomes everywhere.
The most significant change may not be Iran’s rise alone. Instead, many states are increasingly pursuing what is called ‘multi-alignment’. Saudi Arabia engages the US, China and Iran simultaneously. The UAE maintains relations with Washington while expanding ties with Beijing. India cooperates with the US, Russia, Iran, Israel, and Gulf states at the same time.
Türkiye follows an independent regional strategy. This trend weakens bloc politics and strengthens regional powers. If current trends continue, the next decade could be characterised by possible features of the emerging New Order.
