The world awaits a Washington-Tehran deal, which could reshape the regional power balance, as Israel quietly burns the bridges being built.

It's very much a play ending on this war. Not with a bang or perhaps with too many of them already behind us but with diplomats in Omaha exchanging drafts of a memorandum that no one is fully on board with and with drones still buzzing over southern Lebanon and the Strait of Hormuz, a choke point for the global energy system.

This would not have been possible 14 months ago. The attacks started on June 13, 2025, when Israel launched an unprecedented attack against the heart of Iran's nuclear program and military capabilities, including the deaths of several of the Islamic Republic's most powerful figures, in what would later be known as the opening day of the Twelve-Day War. The military campaign that ensued and Tehran's decision in early March 2026 to block the Strait of Hormuz triggered the biggest energy supply shock in history. Fatih Birol, head of the International Energy Agency, called the shipping trouble "the largest supply disruption in the history of the global oil market. But from that dire beginning, the world has been floundering and now, at last, it's looking like a place to land.

But there's nothing pure about this landing.

A deal had been agreed at high levels on the Iranian side as of Thursday evening, although it was not necessarily by Supreme Leader Mojtaba Khamenei. Trump said he was hopeful of a signing ceremony over the weekend. As always, the Iranians hedged Tehran's foreign ministry stated it has "not yet reached a final decision. It's a sentence that the White House has heard before. The White House has twice in the last two months believed that it had reached the brink of a deal, only to see negotiations collapse.

What is actually on the table is all that is needed to understand how radically the power balance in the region has changed. Under the proposed MOU, Iran would never acquire a nuclear weapon and negotiate a suspension of uranium enrichment, which likely would be at least 12 years a compromise between Iran's previous offer of five years and the United States' stance of 20. Once the current moratorium is lifted, Iran will be allowed to enrich uranium to 3.67 percent. How to actually remove Iran's highly enriched uranium stockpile has not yet been agreed upon. This is "very combustible stuff, very volatile stuff," said a senior U.S. official to reporters.

The agreement would also reopen the Strait of Hormuz, which has been closed since early March, and has hampered global energy flows. Meanwhile, the US will lift its naval blockade of Iranian ports which was imposed on April 13. This is not a theoretical matter of economics. The volume of oil that passes through the Strait is about 15.8 million barrels per day, or about 15 to 20 percent of the world's oil supply. With the strait closed, oil revenues in the Gulf are about $1.1 billion a day. While there was some talk of a deal that has seen prices fall back to the $97 per barrel level for the most recent futures this month, the reality of the situation at the worst of the crisis was much harder, with actual cargoes trading at well over $130 per barrel in April.

Much more than crude oil has been affected. But the blockage has revealed a new weakness: the Middle East's ability to supply the world with non-oil commodities, such as fertilizers for global food security to minerals for the energy transition, as shortages alter supply chains in real-time. Shipping insurance has essentially been withdrawn for transits in and out of the Hormuz strait, and even if there is a decision to re-open the strait there is a complex process of negotiations that are required as to who will indemnify ships that attempt transits before a ceasefire comes into effect.

A regional financial drama of epic proportions has intruded into this already complicated picture. Sources close to the deal told Reuters that the UAE has already sent $3 billion to Tehran, and is set to send between $10 and $20 billion, a major move aimed at stopping Iranian attacks. The UAE rejected the suggestion, of course, and denials of regional backchannels are a diplomatic pastime in the Gulf and, if the logic of the transfer is correct, it is very rational. The price of a long closure of the Hormuz strait is too high for Abu Dhabi as well as for Tokyo or Delhi. The strait is closed each week, the UAE loses income and reputation as a global trade center.

The man who would have to put his signature to any final deal in Tehran is himself a man of uncertainties. The Assembly of Experts, apparently under pressure from the Revolutionary Guards, elected Mojtaba Khamenei, 56, as Supreme Leader after his father Ali Khamenei was killed in the joint U.S.-Israeli strike in February 2026. According to the U.S. intelligence, Ali Khamenei himself had opposed the succession of his son, doubting about his son's intelligence and leadership abilities. The new supreme leader was said to have been injured in the same attacks which killed his father. His first message was delivered on the State media, without revealing his face or voice, and after his appointment he went out of sight for a long period, which resulted in much confusion.

In the interim, the funeral of Iran's late Supreme Leader Ali Khamenei has been set to start in Tehran on July 4 and be finalized with his burial in the northeastern city of Mashhad on July 9. The timing is important, too July 4 is the American Independence Day. The date is no accident it must have been picked out for symbolic reasons by some force within the Iranian political system. Whether it's defiant or a cold pragmatism of making sure of a deal before the ceremony and the nationalism that goes along with it is a question Tehran insiders can answer.

It is out of this context of turmoil in Iran's institutions that Israel's situation is perhaps the worst in the region. Netanyahu has been married to the idea of thwarting the idea of Iranian nuclear capacity for 30 years. Now he faces a prospect of a Washington-brokered deal which by most accounts is far from the permanent, verifiable dismantlement that Israel has always demanded. Netanyahu has tried to make any possible deal a personal success "As long as I am prime minister of Israel, Iran will not have nuclear weapons" and has claimed full accord with Trump. The actual terms of any deal haven't yet been publicly released, so that framing will be put to the test when they are.

Trump just hasn't been as diplomatic as is customary. Netanyahu “will have no choice but to sign whatever deal Washington reaches with Iran,” he told the Financial Times in an interview, in which he added: “I call the shots. I call all the shots.

The Lebanon angle in all this has proved the most explosive factor. On June 13, there were reports that Israel's government was putting the brakes on IDF activity in Lebanon for fear of scuttling US-Iran talks, but the Prime Minister's office denied the claim, while Israeli strikes in the south continued and Hezbollah drones continued to target Israeli troops. According to the report, the MOU contains a clause that the war between Israel and Hezbollah in Lebanon would come to an end, a point of contention at least once for Trump and Netanyahu. A Lebanon ceasefire, in a package that does not dismantle the Iranian structure, with a new and reportedly harder line supreme leader at its helm, is a bitter strategic pill for Israel.

Iran itself kept exporting its own crude oil about 2 million b/d until U.S. initiated a blockade on April 13. Unfreezing billions of dollars in Iranian assets in overseas banks, and lifting that blockade, is Tehran's biggest economic demand, and is the tangible relief that would make a deal politically sellable in Iran, at least, with the economic contraction in this country. The currency of the Islamic Republic has been completely corroded, the domestic inflation has been a devastation and the population has witnessed the damage to the country's infrastructure, which hasn't yet been fully taken stock of.

But something that's remarkable to look at in the context of the daily flow of leaks and denials is the extent to which the February strikes changed the strategic picture in the region more than anyone, even the planners of Operation Rising Lion, perhaps, could have predicted. All of these events the decapitation of the Iranian leadership structure, the accession of a less experienced and possibly more rigid supreme leader, the Hormuz closure and its ramifications for the economy are connected dots in a story that no single capital is entirely in charge of.

Today oil companies are benefiting from higher oil prices, but the war has made the environment for future investment far less predictable and riskier for the United States, even as the world's largest oil producer, to the same extent that higher oil prices are affecting it. One reason that Washington is pressing for this deal to get done is that of the structure's exposure. A disruption of any length is not good for American consumers, American manufacturers, or the already complex Fed inflation calculation.

The diplomacy now is not about any one country's victory. It's about who gets to write the rules of a new balance and who has to feign the selection.