The United States and Iran have agreed to a two-week cease-fire, brokered by Pakistan, premised on Iran reopening the Strait of Hormuz.
The announcement came less than two hours before US President Donald Trump's self-imposed deadline was set to expire at 8 pm ET on April 7.
Global markets rallied. Oil prices fell. Leaders around the world expressed relief.
But the cease-fire is already proving to be fragile, with Iranian strikes reported across Arab states in the Persian Gulf just hours after the pause in fighting went into effect. Meanwhile, Israel has continued its attacks in Lebanon on Hezbollah, an Iranian proxy that has been designated a terror organization by Washington.
Talks in Islamabad to secure a permanent peace deal will begin on April 10. Both sides have said the cease-fire is temporary and does not constitute an end to the war.
Here are three things that can determine whether the cease-fire morphs into a peace deal or simply marks a pause in the fighting.
One: State Of The Strait
For decades, the Strait of Hormuz was treated as something close to a global commons -- a narrow passage with a 3.7 kilometer shipping channel between Iran and Oman through which roughly one-fifth of the world's oil and liquefied natural gas flowed freely, unimpeded, and untaxed. That era may now be over.
The cease-fire framework is said to include a provision allowing both Iran and Oman to collect transit fees from ships passing through the strait. This is without precedent. The United Nations Convention on the Law of the Sea explicitly bars states with territorial waters in the strait from charging fees for passage, and no state has ever successfully imposed such tolls on a recognized international strait.
Iran's system, already operational in practice, is more elaborate than a simple toll booth. The Islamic Revolutionary Guards Corps (IRGC) has reportedly developed a ranking system for nations, with ships from countries deemed friendly receiving better terms. Once the toll is paid, the IRGC issues a permit code and route instructions; ships are expected to fly the flag of the nation that negotiated their passage.
But who actually pays? The instinctive answer -- global consumers -- turns out to be largely wrong, according to Guntram Wolff, a senior fellow at the Brussels-based think tank Bruegel.
Because Arab states in the Persian Gulf are responsible for approximately 20 percent of global oil supply, they absorb the bulk of any toll imposed on that supply.
"The Gulf states will have to actually pay, in my computations, around 80 or 85 percent of the toll value," Wolff told RFE/RL. "While global consumers would only have to bear something like 20 percent of the toll cost."
For ordinary consumers, in other words, the toll will likely be "unnoticeable." For Riyadh, Abu Dhabi, and Kuwait City, it will be a recurring bill that will nibble into their profits.
The same logic applies beyond oil. Fertilizers, petrochemicals, and other Gulf-sourced commodities face a similar incidence structure. The Gulf states, having already absorbed weeks of war-related disruption, now face the prospect of permanently subsidizing Iran's reconstruction through the prices they effectively pay to export their own resources.
Iranian officials have been explicit that this is the intention. "The Strait of Hormuz situation won't return to its prewar status," Iranian parliament speaker Mohammad Baqer Qalibaf wrote on X last month.
Two: To Enrich Or Not To Enrich?
In his statement announcing the cease-fire, Trump said Iran’s 10-point proposal “is a workable basis on which to negotiate.” Observers say that the two sides are so far apart in their positions -- and nowhere is the gap more notable than on the question of Iran's nuclear program.
According to the Associated Press, Iran's Farsi-language version of its 10-point cease-fire plan included the phrase "acceptance of enrichment" for its nuclear program -- something absent from the English versions shared by Iranian diplomats with journalists.
Complicating the issue, Trump on April 8 said there will be “no enrichment” of uranium in Iran.
In the Persian text of the proposal, Iran says the two sides will negotiate over the level of enrichment.
"On the uranium, we're watching it. We know what they have, and they will give it up, and we'll get it. We'll take it if we have to," US Defense Secretary Pete Hegseth told a briefing at the Pentagon on April 8.
The stockpile in question is not trivial. According to the UN nuclear watchdog, Iran had accumulated 440 kilograms of uranium enriched to 60 percent purity.
Mediators working on the cease-fire framework concluded that a solution for Iran's highly enriched uranium -- either through its removal from the country or dilution -- could only happen under a final deal, not a temporary truce. Iran's uranium stockpile, they assessed, is one of Tehran's two main bargaining chips, and Tehran will not likely surrender it for a two-week pause in the conflict.
So the uranium question has been deliberately deferred to Islamabad -- where the translation discrepancy is sure to reassert itself.
Three: The Lebanon Question
The cease-fire could unravel over Israel's military operations in Lebanon, which continued unabated on April 8.
Israeli Prime Minister Benjamin Netanyahu's office said the agreement does not include Lebanon, where Israeli forces have launched a ground invasion and are fighting Hezbollah. Pakistani Prime Minister Shahbaz Sharif, the deal's chief broker, said the opposite -- that the cease-fire applies to Lebanon as well.
The disagreement is not a technicality. Iran backs Hezbollah -- a US-designated terrorist group -- and continued Israeli strikes in Lebanon could place Tehran under pressure to respond militarily.
Setting A Precedent?
Wolff offers a final observation that reframes all three of the above. Iran has demonstrated, at enormous cost to itself, that a medium-sized power can impose crippling economic pressure on the global system without winning a conventional war. Does that set a precedent?
"There's not that many countries that would like to experience what Iran has experienced in the last couple of weeks, including the threats of civilizational erasure," Wolff said.
"So, in that sense, it does not set a precedent. But it does set a precedent in the sense that Iran has shown to the world the power of asymmetric warfare. In that sense, it's a strategic defeat for the United States, and a strategic win for any actor that masters asymmetric warfare, that now knows that the guardian of the international order basically does not manage to overcome that."
