&imwidth=800&imheight=600&format=webp&quality=medium "What impact will Israel-Hezbollah truce have on US-Iran talks and the global economy? WION Decodes")
After days of uncertainty over the participants, venue and prospects of renewed talks between the United States and Iran, White House envoy Steve Witkoff is reportedly travelling to Switzerland.
Iran and US were to sit for first negotiations on Friday to chalk out a deal to end the war that started by a joint US and Israel airstrike on February 28. But the fresh Israeli strikes in Lebanon cast doubts on the deal to end the war, and Vice President JD Vance was forced to cancel his visit to Switzerland for the talks.
The ceasefire has brought fresh focus to the broader geopolitical situation in the Middle East and its global implications.
Factors that led to a ceasefire between Israel and Lebanon?
US led diplomatic efforts was the primary factor behind the ceasefire between Israel and Lebanon to prevent regional escalation and protect broader US-Iran negotiations. Washington put pressure on Israeli Prime Minister Benjamin Netanyahu to accept the ceasefire o allow a broader interim deal with Iran to proceed as Tehran has since the start of negotiations been demanded a halt to hostilities in Lebanon.
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Years of conflict in Lebanon, including continued aerial strikes by Israel and ground operations that occupied parts of southern Lebanon led to heavy casualties and caused massive damage to infrastructure in the region. Both, the Lebanese government and its citizens are exhausted by the conflict and looked forward to a halt in the fighting.
US, Qatar and Iran played pivotal roles in bringing Israeli and Lebanese representatives to the negotiating table in Washington in order to achieving a lasting peace.
How does it affect US Iran talks?
Since the start of negotiations with US, Iran has maintained its demand of halt to hostilities on all regional fronts, including Israeli military actions in Lebanon.
Inclusion of Lebanon has been one of Iran's core issues that it considers non-negotiable for a consolidated peace settlement with US. On several occasions Iran has threatened to abandon the agreement entirely if Israeli strikes and its territorial occupation in Lebanon continued.
Iranian Foreign Minister Abbas Araghchi has said that Washington holds a "commitment and responsibility" to force live up to the terms of the peace deal on all fronts.
On the other hand Israel says that military operations in southern Lebanon will continue till the time it perceives Hezbollah as a direct threat.
What could be the impact on oil prices and markets?
The US-Iran peace deal will significantly normalizing commercial shipping which will lead to lower global oil prices. The opening of Strait of Hormuz and lifting of all types of blockades in the vital shipping corridor - through which roughly 20-25% of the world's oil supplies transit - has already pulled down crude oil prices, which now is in its low $80 range. The prices of crude oil during the blockade had gone beyond $126 a barrel.
Several other factors like insurance premiums, maritime risk surcharges, and overall logistics costs associated with transporting oil through the Middle East have begun to decline. Despite these improvements, crude oil prices are unlikely to return to their exact prewar levels immediately.
