Middle East war – all good now?

Hope, but a bumpy road to peace

The U.S. news website Axios reported on Wednesday that the U.S. and Iran are on the verge of a peace agreement. There is reportedly a document outlining Iran’s gradual reopening of the Strait of Hormuz, the end of the U.S. blockade of Iranian ports, and Iran’s commitment to refrain from building nuclear weapons, with the U.S. in return lifting sanctions against the country and releasing billions of dollars in frozen funds. The details would need to be negotiated based on this document. Financial markets reacted euphorically to the prospect of peace; at times, the price of Brent crude fell below $100, and stock prices soared.

So far, there has been no official confirmation of an imminent peace agreement. In recent months, there have been repeated setbacks, such as following the alleged opening of the Strait of Hormuz in mid-April. After all, the positions of the two protagonists are far apart, and mistrust runs deep. We continue to expect a bumpy road to peace. Nevertheless, it is possible that a breakthrough will be achieved soon. We take this as an opportunity to analyze what a peace agreement would mean economically.

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