From "epic rage" to epic disaster

A deal between the United States and Iran to end the conflict may silence the guns, but it cannot change the verdict on more than three months of war.

The region has emerged from one of the most dangerous crises in decades with a largely unchanged balance of power, a politically emboldened Iran and the Gulf's trust in American protection deeply shaken, Gulf sources, diplomats and analysts told Reuters.

Iran remains a powerful and undefeated power, capable of threatening the Arab Gulf states and global energy flows, they say, while the US has once again demonstrated the limits of its military power against a resilient adversary.

For Washington, the deal offers a way out of a costly conflict that has failed to achieve its most ambitious goals - from forcing Tehran to capitulate to dismantling its nuclear and missile capabilities, the sources told the British agency. For Iran, it means something equally important: survival.

After enduring continuous American and Israeli strikes, the Islamic Republic is emerging from the conflict damaged but still standing, preserving both its political order and a large part of the leverage that brought the parties to the negotiating table.

“An epic outrage has become an epic disaster,” said Aaron David Miller, a former US official and negotiator, referring to the US-Israeli campaign launched against Iran on February 28, which killed Supreme Leader Ayatollah Ali Khamenei and top officials.

Gulf turns to cooperation with Tehran

The biggest shock, however, is being felt in the Sunni Arab states of the Gulf, where the stability that has underpinned decades of economic growth has been seriously undermined. By that measure, they are the main losers of the war: bystanders to decisions that have reshaped their security landscape, now forced to suffer the consequences.

The deal, Gulf sources say, has already begun to change strategic thinking in the Gulf, undermining confidence in American protection, entrenching Iran as a permanent regional power, and accelerating a shift toward accommodation rather than confrontation.

A senior source from the government of a Gulf country said bluntly: any de-escalation is positive, but the situation is unequivocally worse than before the war.

"More and more Gulf states are realizing that Iran is staying where it is, that it retains the ability to disrupt the regional order," said Middle East expert Fawaz Gerges.

“The Gulf states don’t trust Iran. They were hoping the US would bring about regime change. The opposite has happened,” Gerges said. “Now more and more Gulf rulers are realizing that they cannot rely on the US or Israel to provide them with security or stability.”

This new assessment marks a deeper shift. The Gulf states have long distrusted Iran but relied on American power to contain it. Now, engagement with Tehran has already begun.

Gulf capitals have intensified contacts with Tehran in recent days, seeking to reach economic and security arrangements to reduce the risk of confrontation, regional sources say.

Before the war, the central regional issue was the extent of Arab-Israeli normalization, Gerges said. After the war, the focus shifted to rapprochement between the Gulf and Iran.

While Washington will remain an indispensable partner, regional analysts say the conflict is likely to accelerate a quiet but important realignment, with Gulf states diversifying defense ties and seeking to protect themselves from future shocks.

Israel dissatisfied

The deal, according to three Israeli officials, also appears unfavorable to Israel, as it omits its key demands, including dismantling Iran's uranium enrichment capacity and restrictions on its missile program.

Officials said Israel was taken aback when U.S. President Donald Trump hinted on Thursday that a deal was close, indicating his limited influence over the terms of the agreement.

Far-right National Security Minister Itamar Ben-Gvir rejected the deal, saying Israel was not bound by it "in any way."

For now, Israeli officials are cautious in public, for fear of angering their most important ally, known for its sensitivity to criticism.

But in private conversations, frustration is evident. The preliminary agreement is “terrible for Israel,” a senior Israeli official told Reuters, speaking on condition of anonymity. “And there is no one in the Israeli leadership who sees it any differently, from the prime minister to the chief of staff.”

Washington says that over the next 60 days, while the ceasefire is in effect, it will negotiate full terms that will address American and Israeli concerns, particularly regarding Iran's nuclear program.

However, Israeli officials believe that the negotiation period provided for in the agreement will likely be extended, which would tie Israel's hands to military action.

Washington did not achieve its goals

Saudi analyst Abdulaziz Sager explicitly claims that Washington has failed to achieve its proclaimed goals, from regime change to curbing Iran's nuclear program, while giving Tehran two new points of strategic leverage - turning Hormuz into a weapon and the ability to directly threaten the Gulf states.

“They went from unconditional surrender to a memorandum of understanding. They gave in,” said Sager, president of the Gulf Research Center, a Saudi-based think tank. “They said they would change the Iranian regime — they failed. They said they would resolve the missile and nuclear issues — that didn’t happen.”

What is being signed, analysts say, is less a peace agreement than a mechanism to stop the fighting.

At its core, fundamental disputes remain unresolved: Iran's enriched uranium, enrichment levels, sanctions relief, security guarantees, and control of key waterways.

The memorandum of understanding, Miller argues, is not a solution but a “ticket to negotiations” – a first phase that buys time and space for talks whose success is by no means guaranteed. Its structure is reminiscent of the framework of the Gaza ceasefire: a pause that postpones the most difficult issues, with no guarantee that they will ever be resolved.

“What will be signed is not peace, but an admission: that the war’s ambitions have exceeded its achievements; that the battlefield has produced a stalemate, and that the Gulf states, which have borne the brunt of the cost, are re-adjusting their security on more precarious ground than ever,” Miller said.

Having endured both internal unrest and external military pressure, Iran now, he argues, faces a different question: whether this war has strengthened, rather than weakened, its sense of resilience, which could have consequences for deterrence in the years to come.

It will be months before the oil market stabilizes.

After more than 100 days of the largest disruption to global energy supplies on record, global oil and gas markets breathed a sigh of relief yesterday.

Hours after Donald Trump confirmed that a US-Iran peace deal would lead to the reopening of the Strait of Hormuz, the price of North Sea Brent crude fell to $83 a barrel. Wholesale gas prices fell by about six percent.

The last-minute deal came just weeks before the oil market was expected to enter the "red zone," when soaring summer demand during the tourist season was set to collide with rapidly depleted crude oil supplies.

But even as markets calm down after weeks of unprecedented disruption, uncertainty remains: a return to pre-crisis conditions is months away and dependent on the Iranian regime's cooperation with the White House.

Despite a sharp decline in global oil and gas markets, prices could now remain between $80 and $90 a barrel for the rest of the year as buyers rush to replenish significantly depleted strategic crude oil reserves.

Market observers estimate that only in July could this route, which previously carried a fifth of the world's oil and gas, begin to contribute to a gradual recovery of exports from the Gulf, while a return to pre-war oil flows is not expected before the end of the year.