An eleventh-hour, provisional two-week ceasefire has been brokered by the United States, pausing a devastating conflict that had threatened to push the region into far deeper instability. The truce was announced by President Donald Trump just minutes before an 8pm Eastern Time (5:30am IST) deadline, after he had warned that failure to reach an agreement would trigger a large-scale bombing campaign targeting Iranian power plants and bridges. The deal, mediated by Pakistan with last-minute diplomatic backing from China, extends beyond Washington and Tehran to include Israel and Lebanon, effectively suspending hostilities involving Iranian proxy forces such as Hezbollah.
At the heart of the agreement lies the Strait of Hormuz, one of the world’s most critical maritime chokepoints, through which roughly a fifth of global oil supplies pass. Iran had disrupted international trade by imposing a partial blockade on the strait, sending shockwaves through energy markets. Trump made clear that the pause in military action was conditional upon Iran agreeing to the “complete, immediate, and safe opening” of the waterway to commercial shipping. Tehran has agreed to allow passage, but with an important caveat. Iranian Foreign Minister Abbas Araghchi stated that navigation would take place under the supervision and coordination of Iran’s armed forces, preserving Tehran’s claim to strategic control over the strait even as it concedes to international pressure.
The announcement of the ceasefire delivered immediate relief to global markets, which had been rattled by fears of a prolonged disruption to energy supplies. The conflict had choked off the flow of oil, fertiliser and even helium, raising the spectre of a wider economic crisis. In the hours following the truce, Brent crude prices fell sharply, dropping below the $100 mark to settle at around $93 a barrel. Equity markets responded with equal enthusiasm. Asian indices surged at the opening bell, with Japan’s Nikkei 225 climbing by 4 per cent and South Korea’s Kospi gaining more than 5 per cent. In the United States, S&P 500 futures rose by over 2 per cent, reflecting investor optimism that the worst-case scenario had been avoided, at least for now.
Yet the political reaction within the United States has been deeply polarised, driven in large part by Trump’s rhetoric during the crisis. On Monday, the president warned that he could “wipe out” Iran’s “whole civilisation” if it failed to comply with American demands. Legal and military experts cautioned that such language, if acted upon, could constitute a war crime. Democratic leaders reacted with sharp criticism. Senate leader Chuck Schumer dismissed the threat as “ridiculous bluster”, while House minority leader Hakeem Jeffries described Trump’s conduct as “unhinged, unpresidential and unconscionable”. Several prominent Democrats, including Alexandria Ocasio-Cortez and former Speaker Nancy Pelosi, went further, calling for his removal from office through impeachment or the 25th Amendment.
Republican responses have been more mixed. While many of them supported Trump, lawmakers such as Austin Scott, Ron Johnson and Lisa Murkowski criticised the extreme rhetoric as counterproductive and inconsistent with American values. More strikingly, fissures have begun to appear within Trump’s populist base. Influential voices such as Marjorie Taylor Greene and Candace Owens condemned the threats as reckless, while segments of the electorate accused the administration of betraying its promise to avoid entanglement in costly Middle Eastern wars.
With the guns temporarily silent, attention now turns to diplomacy. Formal negotiations are set to begin in Islamabad, where representatives from both sides will work from a 10-point proposal submitted by Iran. Trump has described the framework as a “workable basis” for talks, though the gap between the two sides remains substantial. Iran’s National Security Council has made clear that it enters the process with “complete distrust” of Washington, reflecting the deep scars left by the conflict.
Tehran’s proposal amounts to an expansive set of demands. It calls for formal recognition of Iran’s authority over the Strait of Hormuz, the complete withdrawal of US combat forces from the Middle East, and the lifting of all economic sanctions. It also seeks the unfreezing of Iranian assets, compensation for war damage and international acceptance of its right to enrich uranium. For Washington, reconciling these demands with its own strategic objectives within a two-week window will be an immense challenge. The contrast with the painstaking negotiations that produced the 2015 nuclear agreement—requiring more than two years of sustained diplomacy—is stark.
Whatever immediate relief the ceasefire has brought, it does precious little to tackle the underlying causes of the conflict. Iran showed the world that it could absorb nearly 13,000 targeted strikes, and yet retain its capacity for asymmetric warfare. By disrupting global energy flows, and by specifically targeting the Gulf states, it made it clear that it can inflict serious damage without ever fighting a conventional battle. Subsequently, the conflict has rattled confidence among Washington's Gulf allies, including Kuwait, Qatar and the United Arab Emirates, all of whom have been forced to reckon with just how exposed their infrastructure is to Iranian missiles and drones.
Perhaps most tellingly, the American campaign has not destroyed Iran's nuclear capabilities. Tehran still holds a substantial stockpile of near-weapons-grade uranium, which rather undermines one of the central justifications for going to war in the first place. The Iranian political system, meanwhile, remains very much in place. The rise of Mojtaba Khamenei as Supreme Leader — following his father's death in a US strike — adds another awkward dimension to proceedings. By sitting down with the new leadership, the Trump administration has opened itself to the charge that it is inadvertently lending legitimacy to the very regime it set out to cripple, even as it had previously been encouraging popular discontent inside Iran.
The ceasefire, then, is better understood as a pause than a resolution. It has pulled both sides back from the brink and steadied global markets, but the fundamental tensions between Washington and Tehran remain entirely unresolved. Reports of sporadic drone and missile activity in the Persian Gulf in the hours following the agreement are a sobering reminder of just how precarious things still are. Whether the Islamabad talks can turn this fragile breathing space into something more lasting will depend on whether both sides are genuinely willing to move away from their most entrenched positions. For now, the world is watching a narrow diplomatic window open—and hoping it does not slam shut.