Summary:

• The US and Iran signed a preliminary cease-fire agreement at the G7 summit in France.
• Energy prices fell as some Saudi supertankers resumed crossing the Strait of Hormuz.
• The deal includes a $300 billion private reconstruction fund and temporary Iranian oil export waivers.
• Iranian officials declared themselves the clear winner.
• The agreement has opened significant new divisions within the Republican Party.
• Israel described the deal as a major strategic setback.
• US Vice President Vance will meet Iranian officials in Switzerland on Friday.

Energy prices continued to fall on Thursday after the United States and Iran signed a preliminary cease-fire agreement, raising hopes that the Strait of Hormuz will soon reopen to normal tanker traffic. The deal has been welcomed by markets but has drawn sharp criticism from Israel and quiet frustration from Gulf states, while also exposing tensions within the U.S. political system and NATO.

Energy Markets and Hormuz Reopening

Brent crude fell to around $78.48 a barrel, down from levels near $95 seen late last week. In the United States, average gasoline prices dropped below $4 a gallon for the first time in months. Some commercial traffic has already resumed: three Saudi supertankers carrying roughly 6 million barrels of oil crossed from the Persian Gulf into the Gulf of Oman - the first significant volumes of Saudi crude to transit the strait since the war began.

"Oil down," Trump said following the signing, adding that allowing the war to continue "could have caused an international depression."

According to the text of the agreement, Iran will facilitate commercial ship passage through the Strait of Hormuz at no charge for the first 60 days. Full traffic is to resume within 30 days once technical and military obstacles are addressed and mines are cleared. Iran will hold talks with Oman on the future administration and maritime services of the waterway in line with international law. The United States and Gulf states have opposed any Iranian toll on what they regard as international waters.

Key Elements of the Preliminary Deal

The memorandum of understanding, signed by President Donald Trump and Iranian President Masoud Pezeshkian, launches at least 60 days of negotiations that could begin as early as Friday. It includes temporary waivers for Iranian oil exports, a commitment to halt hostilities linked to the Israel-Hezbollah conflict in Lebanon, and a $300 billion private investment vehicle - the Reconstruction and Development Fund - designed to channel capital into Iran’s energy, logistics, manufacturing, and transport sectors.

More than half of the $300 billion has reportedly already been pledged by companies based in the United States, Gulf Arab states, Asia, South America, and Africa. The fund contains no government grants or U.S. taxpayer money and will only become operational after a final, comprehensive agreement is reached. It is separate from parallel talks on sanctions relief and unfrozen Iranian assets. Iran had originally sought $400 billion in war-damage compensation; the private fund mechanism emerged as the compromise.

A formal signing ceremony scheduled for Friday in Geneva is now in doubt after Iran’s foreign ministry indicated the remote signing may have made it unnecessary, though negotiating teams are still expected to meet there.

Iran Presents a United Front

Iranian officials have moved swiftly to project a unified public stance following the signing of the preliminary cease-fire agreement. After weeks of reported internal political friction - during which some hardliners reportedly sought to derail the deal - senior figures are now emphasizing national victory and the need for domestic cohesion.

Seyed Abbas Mousavi, a senior government official, stated that only a “small number” of critics remain inside Iran and described the country as the clear winner of both the war and the subsequent negotiations. Foreign Ministry spokesman Esmail Baghaei went further, comparing the work of Iranian diplomats to that of soldiers operating “behind launchers and in trenches,” and urged the public to extend the same level of support to the negotiating team as it had to the military during the conflict.

This coordinated messaging marks a notable shift from the divisions that surfaced during the war and stands in contrast to the public criticism that has emerged from some Republican lawmakers in Washington since the deal was signed

GOP Rift

Trump’s preliminary agreement with Iran has opened new fissures within the Republican Party. While some lawmakers praised the president for ending the fighting, others - including longtime allies and prominent conservatives - expressed sharp criticism, skepticism, and alarm over what they see as insufficient concessions from Tehran.

Senator Bill Cassidy of Louisiana called the war “the worst foreign policy blunder in decades,” arguing that Iran’s nuclear ambitions were not curbed and that the regime had successfully used the closure of the Strait of Hormuz to extract concessions. “Reagan is rolling over in his grave,” he wrote on social media.

Senator Ted Cruz questioned whether the deal amounted to “giving $300 billion to the Iranian ayatollah,” while former U.N. Ambassador Nikki Haley said it was “a huge mistake to pay to rebuild the threat we just destroyed.”

"History teaches us giving billions of dollars to theocratic lunatics who want to murder us is not a good idea," Cruz continued. 

Former Representative Marjorie Taylor Greene described the war as “totally unnecessary” and sarcastically remarked, “This, apparently, is what winning looks like.”

The New York Post ran a critical front-page headline on Wednesday, accusing Trump of hitting Iran with a “LOVEBOMB” of cash and sanctions relief. Conservative pro-Israel commentator Mark Levin also said he found “much to be concerned about” in the agreement.

The backlash highlights a difficult balancing act for Mr. Trump. At the start of the conflict, he faced pushback from “America First” isolationists who opposed entering a new war. Now, as he tries to end it, he is drawing fire from more traditional national security conservatives who believe the deal fails to deliver lasting limits on Iran’s nuclear program or regional influence.

Not all Republicans were critical. Senator Tim Scott called the agreement a “major victory for American security and global stability,” while Senator Lindsey Graham expressed cautious optimism, saying he saw “little downside to trying” to reach a verifiable nuclear deal during the coming 60-day period.

Trump responded to his critics on Wednesday, dismissing them as “stupid and bad people” and insisting he had the support of the international community.

Washington and NATO Tensions Flare

The deal has faced pushback inside the United States, including from some Republican lawmakers concerned about the scope of sanctions relief and the reconstruction fund. Defense Secretary Pete Hegseth delivered a pointed rebuke of NATO allies in Brussels, calling their refusal to facilitate U.S. strikes on Iran “shameful” and announcing a six-month review of American troop presence in Europe. He warned that U.S. support for the alliance would not be “a one-way street” and signaled possible cuts to Washington’s NATO contributions if allies do not increase defense spending.

Israel Views the Deal as a Strategic Setback

Israeli analysts described the agreement as failing to achieve any of Israel’s primary war aims and potentially leaving the country worse off. The deal does not limit Iran’s ballistic-missile arsenal or its backing of proxy forces such as Hezbollah and the Houthis. The nuclear file is deferred to future talks. It also seeks to constrain Israeli operations in Lebanon and calls for Israeli forces to withdraw from southern Lebanon - positions Prime Minister Benjamin Netanyahu has rejected, stating that Israel is not a party to the agreement and is not bound by its terms.

Commentators in Israel have characterized the outcome as a significant diplomatic reversal, noting that Iran appears emboldened, retains its missile capabilities, and stands to gain substantial financial resources that could flow to its military programs and regional allies. U.S. forces are also required to pull back from Iran’s immediate vicinity within 30 days under the framework.

Meanwhile...

Gulf States Express Disappointment

Governments across the Persian Gulf - Kuwait, the UAE, Bahrain, Saudi Arabia, and Qatar - expressed disappointment that the agreement contains no curbs on Iran’s missile and drone programs. Analysts noted that Gulf states had hoped for stronger limits after suffering Iranian missile and drone attacks on airports, energy facilities, and other sites during the conflict.

Bader Al-Saif, an assistant professor of history at Kuwait University, said excluding Iran’s missiles and drones from the agreement showed that the United States “doesn’t have our best interests in mind.”

Mr. al-Saif said he has no doubt that Iran was already rebuilding its missile and drone capacities and that it would use the financial windfall it gets from the deal to acquire more of the weaponry. The agreement, which U.S. and Iranian officials have called a memorandum of understanding, says the Department of Treasury will issue waivers for the export of Iranian crude oil, petroleum products and derivatives. -NYT

President Trump’s recent public remarks that Iran should be permitted some ballistic missiles because neighboring countries possess them drew particular notice, contrasting with earlier U.S. statements that the objective included denying Iran the ability to threaten the region with such weapons.

Regional experts assess that Gulf governments may now accelerate investment in air-defense systems and seek technical cooperation with countries such as Ukraine and South Korea. While some voices question long-term reliance on the United States as a security guarantor, analysts emphasize that any meaningful strategic reorientation would take a decade or more to develop.

What Happens Next

U.S. Vice President JD Vance and Iranian Parliament Speaker Mohammad Bagher Ghalibaf are scheduled to meet in Switzerland on Friday to mark the agreement and launch the next round of negotiations. The 60-day period extends the existing cease-fire and will focus on Iran’s nuclear program, sanctions, and regional security arrangements. Whether the preliminary deal can be turned into a lasting settlement remains an open question amid the competing pressures from Israel, Gulf states, and domestic politics in Washington.

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