THE journey from the brink of catastrophic destruction to sustainable peace has culminated in the landmark signing of a US-Iran peace agreement. Pakistan played a significant role in achieving what was long considered unachievable. As host and guarantor, Prime Minister Shehbaz Sharif signed the accord, countering speculative media narratives, including a Financial Times report attributing leverage to Qatar. The breakthrough echoes the Pak-China “Four-Point Peace Agreement”, reflecting commitment to regional peace and stability through dialogue, diplomacy and development. The moment is historic and, in its quiet finality, somewhat anticlimactic. On June 17, President Donald Trump and President Masoud Pezeshkian signed a Memorandum of Understanding to end 47 years of hostility. For the first time, American and Iranian presidents have signed a mutual accord, marking the beginning of a new Middle East. This signals a shift toward diplomacy over confrontation.
The initial agreement extends the ceasefire for another 60 days and mandates the reopening of the Strait of Hormuz. The 14-point MOU includes: Permanent termination of military operations on all fronts, including in Lebanon, mutual respect for each other’s sovereignty and territorial integrity, final deal negotiations to be concluded within a maximum of 60 days, extendable by mutual consent, removal of the naval blockade and any disturbances or impediments against Iran, to be fully completed within 30 days, Iran will use its best efforts to arrange the safe, toll-free passage of commercial vessels from the Persian Gulf to the Sea of Oman and vice versa for a period of 60 days, the United States, in partnership with regional partners, undertakes to develop a definitive, mutually agreed plan with a fund of at least USD 300 billion for the reconstruction and economic development of Iran.
Moreover, the United States undertakes to terminate all types of sanctions against the Islamic Republic of Iran, including those stemming from United Nations Security Council resolutions, Iran reaffirms it shall not procure or develop nuclear weapons, agreeing to maintain the status quo, the U.S. Department of the Treasury will issue waivers for the export of Iranian crude oil, petroleum products and derivatives, along with all associated services including banking transactions, insurance and transportation, the US undertakes to make fully available all frozen or restricted funds and assets of Iran, an executive body will be formed to monitor the successful implementation of the MOU and future compliance with the final deal and last but not least, the final deal will be endorsed by a binding United Nations Security Council resolution.
This is a holistic, comprehensive, productive and participatory new chapter in the Middle East’s geo-economics and geopolitics, bringing peace, stability and harmony. The peace agreement has profound spillover effects for Iran, the Gulf Cooperation Council (GCC), Pakistan and even the US, which can now halt the hemorrhaging of funds on a futile war. The previous conflict produced devastating global disruptions in oil, gas and food supplies, volatile markets and high inflation, making the survival of common people and communities exceedingly difficult.
Once successfully operationalized, the accord will revitalize Pak-Iran bilateral relations. This includes greater socio-economic cooperation, financial integration, the restoration of energy supplies (notably the Pak-Iran Gas Pipeline), investments, joint ventures and a boost to trans-regional connectivity. Pakistan’s successful mediation has opened a wider window of opportunity for both nations. It would also a strategic addition in the CPEC’s West Asia connectivity.
The agreement will enhance trust levels between Iran and the GCC states primarily the UAE, Kuwait, Oman, Bahrain, Qatar and Saudi Arabia in the domains of security, energy, infrastructure development and trade. It represents a giant first step toward economic, trade, social, political and diplomatic connectivity with the US, EU and the rest of the world. All parties must now discontinue their proxy conflicts and divert their energies toward joint projects of greater regional progress, prosperity and peace, creating numerous win-win propositions for all. A sincere effort must also be initiated to jointly work for a sustainable peace by allowing a “Two States Option” for Palestinians too.
Despite ongoing nationalistic narratives about a so-called US decline, this agreement yields numerous benefits for America. A key domestic gain would be positive electoral results for the incumbent administration. Geopolitically, it allows for a direct realignment with Iran, creating the diplomatic space and cushion necessary to advance the Abraham Accords. This accord could be the first step toward new economic, political and military alignments in the region. A “Quadrilateral” security partnership or dialogue among Pakistan, Saudi Arabia, Egypt and Turkey is very much within the frame of possibility, potentially countering an emerging UAE-India-Israel alliance, which may see entities like Somaliland, Ethiopia and Ghana join its orbit. The peace agreement thus marks the beginning of a realigned regional order.
The announcement and signing have directly buoyed energy and financial markets, with a subsequent decrease in oil prices serving as a healthy sign for global consumers. By granting Iran the immediate right to resume global crude oil sales, unfreezing billions in foreign assets and paving the way for a $300 billion international reconstruction fund, the agreement has lowered global oil prices and secured the reopening of the Strait of Hormuz.
In conclusion, this accord should be projected as a courageous, long-term decision by President Donald Trump and Iranian government’s wise and logical decision in which Pakistan and particularly Field Marshal General Asim Munir has played an important role for regional peace, made by resisting pressure from Israel and its lobby. With the strengthening of the Iranian rial, a surge in investment, the smooth supply of energy resources and Iran’s reintegration into the global trading system and international engagement, pleasant changes are on the horizon for all.
—The writer is President, the Centre for Knowledge and Public Policy, Regional Expert: China, CPEC, BRI & World Affairs.
