US-Iran Peace Roadmap Explained: 5 Key Points as Crude Oil Falls Below $76 and Sensex Gains

The hopes of conclusion of the 4-month-long US-Iran war are currently high after war mediators, Pakistan and Qatar, said in a joint statement on Monday after high-level talks at the Bürgenstock resort in Lucerne, Switzerland, that the United States and Iran have agreed on a roadmap to reach a final deal within 60 days.

"The High Level Committee has agreed upon a roadmap towards reaching a final deal within 60 days, laying the foundation for the immediate commencement of further technical talks," the joint statement read.

Both countries also agreed to set up a deconfliction mechanism for Lebanon to stop military operations in the region.

Top point of the 60-Day Roadmap

The agreement, formally signed as a 14-point Memorandum of Understanding on June 17, is not a final peace deal but a general plan that starts a 60-day negotiation window which can be extended by mutual consent. The key points of the roadmap include the following as per CNBC report:

1. Iran and the US agreed to end the war on all fronts including Lebanon immediately and permanently, and to refrain from the threat or use of force against each other.

2. Washington agreed to lift its naval blockade of Iran, while Tehran agreed to restore commercial transit through the Strait of Hormuz at pre-war levels.

3. The US has committed to stop all types of sanctions against Iran including UN Security Council resolutions, IAEA resolutions, and all unilateral US sanctions as part of the final deal.

4. Iran, in turn, has said that it shall not procure or develop nuclear weapons.

5. The US and its allies in the region have also agreed to create a plan to rebuild Iran's economy and help it develop, worth at least $300 billion. Iran got special permission and has been allowed to sell oil and petrochemical products again, and some of their money that was blocked is expected to be given back to them.

Crude Oil Falls Sharply on Deal Hopes

Global crude oil prices have corrected sharply since the US-Iran peace deal was announced. Brent crude fell nearly 2% to around $79 per barrel today, its lowest level in about three months after having traded near $83 per barrel earlier.
WTI crude also dropped below $75 per barrel today after the news that the US would allow Iran to immediately begin selling crude under the terms of the deal.

According to available data, the Strait of Hormuz handles nearly 20% of global oil supplies, or roughly 17-20 million barrels per day. During the conflict, an estimated 14 million barrels per day were being shut in from the global market every day the strait was closed, according to the International Energy Agency (IEA). During the peak of the Crisis, the crude prices surged above $100 per barrel to a record high level.

Indian Market React Positively

For India, the deal is going to bring major economic relief and other trade-related challenges. The Indian equity market this morning opened higher on this optimism. Nifty began the day above 24,100 while Sensex was up 295 points at 77,096. Indian Rupee is currently trading near 94.3 per dollar after it fell 9 paise to open at 94.42 against the previous close of 94.32. As per Trading Economics, "The currency steadied after reaching six-week highs as easing geopolitical tensions and softer crude oil prices supported sentiment."