Deal Doubts Arise As Lebanese, Iranian Officials Say US Must Rein In Israel To Secure Regional Peace

Summary:

• Iran Says Peace Deal Requires Israeli Withdrawal From Lebanon
• Hormuz Fears Ease As Trump, Ghalibaf Virtually Sign US-Iran Deal, But Energy Flows Remain Months From Normal

Polymarket:

Lebanese Parliament Speaker Nabih Berri and his Iranian counterpart, Mohammad Bagher Qalibaf, held a call earlier, urging the U.S. to compel Israel to end its bloody war on Lebanon, stop home demolitions, and withdraw from occupied Lebanese territory, according to Turkey’s state-run Anadolu Agency.

Iranian officials earlier said that any agreement with the US aimed at peace requires Israel to withdraw its forces from southern Lebanon. 

AA continued:

The call came during a phone call between Berri and Qalibaf in which they discussed the latest regional developments following a US-Iran agreement to end their war all on fronts, including Lebanon, according to the Lebanese state news agency NNA.

The two officials also reviewed “the military and political developments related to the memorandum of understanding between the US and Iran, particularly the clause concerning ending the Israeli war on Lebanon,” the agency said.

They stressed “the need for the United States, the guarantors of the memorandum of understanding and the international community to assume their responsibilities by compelling Israel to end its war, stop demolishing villages, respect Lebanon’s sovereignty and immediately withdraw from the territories it has occupied.”

Meanwhile, I24NEWS Hebrew reporter Guy Azriel wrote on X, “I can now confirm that Israel formally requested access to the Iran MoU and was denied. A remarkable and highly unusual development between close allies on an issue of such critical national security importance.”

I can now confirm that Israel formally requested access to the Iran MoU and was denied. A remarkable and highly unusual development between close allies on an issue of such critical national security importance.

— גיא עזריאל Guy Azriel (@GuyAz) June 16, 2026

President Trump has criticized Israel’s handling of its combat operations against Hezbollah as too bloody.

Hormuz Fears Ease As Trump, Ghalibaf Virtually Sign US-Iran Deal, But Energy Flows Remain Months From Normal

President Trump, Vice President JD Vance, and Iran’s Parliament Speaker Mohammad Bagher Ghalibaf have virtually signed a peace deal to end the U.S. naval blockade of the Strait of Hormuz, Iranian ports, the general Gulf region, and begin 60 days of nuclear negotiations, according to CNN, citing US senior sources. 

The text of the so-called memorandum of understanding, a 14-point document that should lead to a two-month extension of the ceasefire and the start of negotiations over Iran’s nuclear program, has yet to be published.

But Trump stated overnight the deal terms will be released “pretty soon,” likely after the formal signing ceremony in Geneva on Friday. Trump, who is attending the G7 club summit in France, suggested that he would not attend the signing event at the end of the week. 

VP Vance is expected to lead the American delegation in Switzerland on Friday to formally sign an interim peace deal with Iranian Parliament Speaker Mohammad Bagher Ghalibaf.

Trump pushed back on MSM reports that his administration is considering a $300 billion fund for Iran as part of an agreement to end the war.

“Iran has agreed to never have a Nuclear Weapon! Also, the story that the U.S. is paying Iran 300 million Dollars is Fake News, put out by the Dumocrats!!!” Trump wrote in a Truth Social post.

Trump’s Truth Social comments came shortly after VP Vance, the Iranians “could have access” to a $300 billion reconstruction fund. 

“That’s the sort of thing they could have access to, funded by the Gulf Coast coalition, so long as they honor their end of the obligation,” Vance told CBS News in an interview. 

The interim peace deal signals a major diplomatic breakthrough, though Israel remains opposed. Prime Minister Benjamin Netanyahu said he and Trump “do not always see eye to eye.” Conflict between Israel and Iran-backed Hezbollah continued Monday in southern Lebanon. 

With the Strait of Hormuz set to open on Friday, blockades and the clogged maritime chokepoint could soon be in the rearview mirror, but the effect on physical markets could last for months, if not longer. 

Barclays commodities/energy research analyst Amarpreet Singh maintained his $100/b forecast for Brent this year. 

Singh explained:

• If the tentative agreement to ease the dual blockade of the Strait of Hormuz is realized, the timing of the restoration of freedom of navigation through the Strait of Hormuz could fall largely in line with our end-June baseline. We maintain our view that Brent should average $100/b in 2026 in that scenario.
• This marks the 16th week of the Iran war and the first eleven weeks led to a more than 350 mb decline in global total oil inventories. Last week, US commercial total oil inventories were already below the trough of early 2022 and declining at a fast pace.
• We forecast a small deficit in Q3 26 in our baseline, as the cyclical demand vector is the strongest since 2022. We recommend going long the Dec 26 minus Dec 27 calendar spread in Brent futures, at $4.67/b at the time of writing.

Normalization of physical energy markets could take many months.

He continued:

The US and Iran have reached an agreement to ease restrictions on trade flows through the Middle East Gulf, with formalization expected by Friday. While early indications suggest that freedom of navigation through the Strait of Hormuz could be restored by month‑end, this does not imply an immediate normalization of physical oil supply chains. Despite this, oil prices have moved sharply lower: prompt‑month Brent and WTI are down around 5% on the day, and the forwards‑implied 2026 Brent average has fallen to $86/b, well below our $100/b forecast. We maintain our view. Inventories are already extremely tight and continue to draw, and our balances point to a modest deficit in Q3 2026 – conditions that are inconsistent with the magnitude of the current price pullback.

This marks the 16th week since the Iran war began. We have inventory data for 14 of those weeks, with the latest observation for the week ending 5 June (Figure 1). Adjusting for shipping lags – typically two to three weeks for Middle East Gulf flows based on last year’s trade patterns – and using pre‑pandemic seasonality (2017–19 average), the first 11  weeks of the conflict resulted in a cumulative 352 mb decline in global total oil inventories, based on our weekly global total oil inventory indicator (Figure 2).

Translating the observed ~4.6 mb/d cumulative inventory draw over this period using the historical beta between inventory changes and market imbalance implies an underlying deficit of roughly 7.3 mb/d on a seasonally adjusted basis. This compares with our non‑seasonally adjusted estimated deficit of 6.6 mb/d for Q2 26. Given that Q2 typically runs a small surplus, realized outcomes to date remain broadly consistent with our balance estimates.

A common pushback to our view is that a significant share of recent inventory draws reflects releases from strategic reserves, which would limit price implications (Figure 3). Our response is that, adjusted for long‑term seasonality, US commercial total oil inventories stood 7 mb below the early‑2022 trough as of 5 June and have been declining at a weekly rate of 11 mb over the past four weeks (Figure 4). Even if the Strait normalizes by month‑end, we expect this tightening trend to persist at least through July. Moreover, unlike in 2022, current US SPR releases are structured as loans rather than outright supply additions.

This raises a key question: with commercial inventories entering peak demand season at historically tight levels and the cyclical demand impulse the strongest since 2022, why should prices not be materially higher? Around 60% of oil demand is tied to the production and movement of goods. While a gradual easing toward $80/b Brent by end‑2027 appears plausible, we see near‑term risks to prices as skewed to the upside.

Key overnight developments (courtsey of Bloomberg):

US-Iran Deal Framework

• The US and Iran are preparing to formally sign their interim peace deal in Switzerland on Friday, with a 14-point memorandum of understanding that should lead to a two-month ceasefire extension and the start of negotiations over Iran’s nuclear program
• The text of the memorandum of understanding has yet to be published, though a senior US official said it’s possible that happens in the next two days 
• Iran claims the lifting of the US naval blockade has begun and entered the implementation phase, according to Deputy Foreign Minister Majid Takht-Ravanchi
• Iran will allow free Hormuz transit for 60 days under the pact 

Trump Administration Statements 

• President Trump said the US is dealing with ‘rational’ people in Iran now and described Iran’s current leadership as ‘nice’ to deal with 
• Trump stated that Iran will suffer if it tries to attain a nuclear weapon and that Iran will not develop or buy a nuclear weapon 
• Trump said the deal with Iran can survive if Israel attacks Lebanon, though he is ‘not happy with the way Israel has handled themselves with Lebanon and with Hezbollah’ 

Israel-Lebanon Tensions

• Iran’s Foreign Minister Abbas Araghchi said the deal ending the war with the US would require Israel to withdraw from Lebanon 
• Iran’s foreign minister said any Israeli forces remaining in southern Lebanon, or any strikes on the country, would constitute a violation of the US-Iran deal 
• Israeli officials said Monday that troops would stay in Lebanon, as ‘Trump’s agreement does not bind us’ 

Netanyahu Political Impact

• Benjamin Netanyahu has staked his political future on his relationship with Donald Trump, but that’s become a liability now that the US president has cut a deal with Iran that much of Israel opposes •
• Netanyahu is preparing for an election this fall and must contend with an agreement that will leave the Islamic Republic intact, an unpalatable prospect to Israelis of all stripes 

Strait of Hormuz Reopening 

• Two Iran-linked tankers are sailing eastward through the Strait of Hormuz ahead of the US and Iran signing an interim peace agreement on Friday that would re-open the waterway 
• Qatar is planning to rapidly boost LNG production once the Strait of Hormuz reopens, aiming to restore most of its export capacity within two months 
• QatarEnergy told buyers it expects to raise output to about 50% of capacity a month after safe passage through the strait is restored, and to roughly 80% within two months