Peace talks: America and Iran must strike a new balance in their standoff—it’s not an impossible mission

On Friday, after a US-pushed Israel agreed to a regionwide pause in the war they jointly began, Tehran declared that strait open to all traffic for the ceasefire period via a sealane that hugs Iran’s coast.

The White House began to wax victorious and energy markets eased on signs of a resolution in sight. But by Saturday, Tehran had clamped the Strait of Hormuz shut again, even firing at a couple of Indian-flagged vessels.

Iran’s shots rang out loud and clear, as if to restore its control of oil and gas supply from the Gulf and show its grip on global prices. A big let-down, no doubt.

Yet, within a span of seven days, we may well have reached a pivotal point in West Asia. Both sides seem keen to clinch some sort of truce extension. With neither backing down from maximalist positions, however, it is US power that faces a moment of truth.

If the US trade blockade of Iran was meant to be a game changer, Tehran’s refusal to buckle suggests it was not. The two are still stuck in a ‘gnash equilibrium,’ a scenario where neither can gain by acting on its own.

The Islamic Republic might have deemed an economic squeeze endurable, just as it endured earlier forms of ‘maximum pressure.’ And if its dilatory tactics are aimed at turning time against a US leader who faces an electoral test by year-end, this ploy risks proving costly.

For everyone’s sake, their own included, both battle-hardy players need to back down and find a new balance that both can live with.

On the nuclear standoff, America should respect Iran’s right to enrich fuel for power plants under the Non-Proliferation Treaty (NPT), while Tehran must give up its over-enriched stock of uranium in honour of its NPT pledge not to make a nuke.

In lieu of a calibrated rollback of US sanctions, that stuff could be placed in neutral custody. A nuclear deal may be less of a challenge if the US does not grant Israel a veto.

That said, for durable peace in West Asia to be more than just a cloudy dream, talks must not just involve the whole region, but take up the prickly issue of Palestine as well. It may require a shift in US public opinion before the Oslo spirit can be revived in Tel Aviv, but a free Palestinian state with Jerusalem shared with Israel (under the UN’s watch) is an idea that could yet be salvaged from the Gaza war’s rubble.

But then again, that’s a long-horizon solution at best. For now, only the current crisis needs to be resolved.

The US and Iran must find a way forth that relieves the world of an economic shock. With Hormuz shut, the risk curve of stagflation—stagnant output amid fast-rising prices—may have little time left to bend before it spikes. Some forecasters fear it might already be too late for many economies, given the war’s disruptions and scars.

Thankfully, the White House and Iran’s regime are said to have traded feelers over the weekend. The world’s biggest power has waged eco-warfare on this defiant republic ever since its 1979 revolution.

Now that Tehran has bared its firepower in this theatre, America’s best bet would arguably be to do what it takes to reclaim its sway over the globe’s prospects of prosperity—without the use of force.

Should Iran soften its stance, so must America. A reset balance could eventually favour the side with more at stake globally.