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Key events
Natasha May
Continuing from the last post:
Philippines president Ferdinand R Marcos Jr was also optimistic, saying the freedom of navigation returning to the Hormuz strait was “what we have been hoping for since the day after the war started”.
However, he acknowledged that recovery from the crisis would take time due to the scale of instability, saying:
Because of the enormity of the problem, of the instability that this war has caused – it’s inevitable that it will take some time for us to adjust back to what will be the new normal.
The Middle East conflict has provided a “stark wake-up call” for south-east Asia’s energy system, the International Energy Agency said in a new report – exposing deep structural vulnerabilities linked to import dependence, limited diversification and concentrated supply routes.
If these energy security vulnerabilities were not addressed, the report predicted, the region’s energy import bill could more than triple from $80bn in 2024 to $245bn by 2035.
Natasha May
South-east Asian nations – which were amongst the first and the hardest hit by the energy crisis due to their heavy reliance on Middle Eastern oil – have welcomed the US-Iran agreement on ending the war, particularly relieved at the reopening of the strait of Hormuz.
Before the crisis, about 60% of south-east Asia’s imports of crude oil and a third of its imports of gas were coming from the Middle East, while 45% of its oil product supply were dependent on Middle Eastern crude. The conflict led to immediate price shocks and governments across the region implementing policies such as encouraging the public to reduce their air conditioning and working from home.
Thailand’s ministry of foreign affairs said in a statement this week that the country “warmly welcomes the agreement reached” and hoped it would lead to “lasting peace and stability in the region, global economic stability and freedom of navigation through the strait of Hormuz”.
Domestic diesel prices in Thailand have seen a steady decline over the past week, with energy minister Akanat Promphan projecting that if the situation in Middle East remained stable, oil prices would likely return to normal in the near future.
US-Iran deal takes immediate effect, says Pakistan
Pakistani prime minister Shehbaz Sharif said earlier in the day that the agreement between the US and Iran agreement was taking “immediate effect” after being signed by both sides.
He said on social media that “as a first step, Islamic Republic of Iran will instantly reopen the Strait of Hormuz and the United States of America will immediately lift the naval blockade”.
Sharif, who helped mediate the memorandum of understanding, also reportedly said there would still be a formal signing ceremony in Switzerland on Friday to “commemorate this landmark event and commence with the technical level talks”.
Summary: Tehran says it will charge ships crossing strait of Hormuz after 60 days
Welcome to our continuing live coverage of the crisis in the Middle East.
The US and Iran have released the text of an interim agreement their presidents have signed to end their war, but Donald Trump has threatening to resume attacks and kill Iranian officials if Tehran fails to honour its commitments.
Trump, attending a G7 summit with other leaders in France, also withdrew at least one of his stated rationales for initially attacking Iran, saying it would be “unfair” for Tehran not to have ballistic missiles, although he previously vowed to obliterate them.
“We’re going to bomb the hell out of them if they violate the agreement,” Trump said of Iran at a press conference. “I don’t want them to. I want them to honour the agreement.”
The 14-point memorandum of understanding extends an April ceasefire by another 60 days, including in Lebanon, to allow the two sides to negotiate a final truce over the coming 60 days.
The agreement also includes the full resumption of maritime traffic “with no charge” in the strait of Hormuz, the lifting of a US blockade of Iranian ports, the waiving of US sanctions on Iran, the unfreezing of its assets, and a $300bn investment fund for Iran’s post-war reconstruction.
However, lead Iranian negotiator Mohammad Bagher Ghalibaf said the Hormuz strait “will not return to prewar conditions” and that Iran would charge ships to transit the waterway after the 60-day toll-free period stipulated in the agreement. Trump has previously said he will not accept tolls being imposed for crossing the vital energy route.
In other developments:
Iran’s leaders did not address the new threats while celebrating the deal, with Ghalibaf saying on state television: “Everything we sought to achieve through military action, we obtained several times over through negotiation; it was not even comparable.” The deal included the unfreezing of billions of dollars in Iranian assets, he claimed.
Trump and Iranian president Masoud Pezeshkian both digitally signed the memorandum of understanding in English and Farsi, US and Iranian officials said. Iran’s foreign ministry said the agreement was already in effect as of Wednesday, as did mediator Pakistan.
Under the agreement Iran also undertakes not to build nuclear weapons, reaffirming a vow it had made for decades. It also agreed to an on-site “down-blending” of its stockpile of enriched uranium.
Trump signed just before a grand dinner with French president Emmanuel Macron at the Palace of Versailles, the site of the signing of the treaty that formally ended the first world war. G7 leaders hailed the agreement at their summit in France. The US has said a formal signing ceremony for the deal is due to be held in Switzerland on Friday.
Oil prices fell again on Wednesday on prospects for the reopening of the Hormuz strait, with Brent crude futures below $80 – their lowest level since the war’s start – but later regaining more than 1% after Trump threatened renewed violence. After the signing US crude dipped 1.25% to $75.83 a barrel and Brent crude was down 1.4% to $78.41 a barrel.
Donald Trump entered the war with maximalist goals and exits it with a pragmatic decision to end the conflict despite the political cost, Andrew Roth writes in this analysis.
With news agencies
