Almost 36 hours into the ceasefire, international market pricing is recognizing its fragility.

This stems not only from the inherent complexity of negotiating the next steps among the US, Iran, and Israel, but also, and more crucially time-wise, disagreement over what was actually agreed upon.

The disagreement centers on two primary issues:

The Straits: Iran maintains that it is entitled to control the flow of ships and collect tolls. In contrast, the rest of the world demands a return to the "freedom of navigation" that prevailed before the war. The U.S. position seems to be a mix of managed and free navigation.

Lebanon: Pakistan, the mediator of the ceasefire, and Iran insist that Lebanon is covered by the agreement. Israel denies this and mounted its largest attack on Lebanon since the war began, reportedly killing over 200 people. While the US describes this as a "genuine misunderstanding," the EU and UK are pushing for Lebanon’s formal inclusion in the truce.

The longer these two issues remain unresolved, the harder it will be to transition to the next stage of negotiations.

In the meantime, oil prices risk climbing back above $100, placing pressure on markets and a global economy already feeling the war’s stagflationary winds.

(These are the immediate issues. A follow-up post will address more secular considerations.)

#economy #markets #middleeastwar