Ahead of the U.S. midterm elections, President Trump has proposed a ceasefire with Iran. However, negotiations are expected to be difficult as Iran demands the lifting of U.S. sanctions as a precondition.
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Russian media reported that discussions for a ceasefire between Iran and the U.S. have begun following a proposal by U.S. President Donald Trump. According to these reports, the main content involves a swap: Iran would lift its blockade of the Strait of Hormuz, and the U.S. would lift economic sanctions against Iran. Following these reports, international oil prices fell, showing an immediate market reaction.
Regarding the ceasefire discussions reported by Russian media, Iran stipulated that even if the Strait of Hormuz were opened, only merchant ships would be allowed to pass, not warships. Furthermore, Iran viewed President Trump's ceasefire proposal as a political move ahead of the midterm elections, expressing strong doubts about its sincerity. This demonstrates Iran's cautious stance toward the U.S. proposal.
The U.S. appears to believe that limited military action alone will not be sufficient to bring Iran to the negotiating table. Analysts suggest that it is difficult to change Iran's attitude when the objective of a military attack is unclear. Consequently, there is a possibility that the U.S. may shift its strategy from military pressure to prolonging economic sanctions.
The U.S. demanded that China stop importing Iranian oil, but China refused, raising questions about the effectiveness of U.S. sanctions. Iran is circumventing U.S. sanctions through various methods, and the card of blocking the Strait of Hormuz also carries significant uncertainty. China's non-cooperation is expected to be a considerable constraint on the U.S.'s pressure strategy against Iran.
Israeli Prime Minister Benjamin Netanyahu publicly revealed that his son was under an assassination threat from Iran. Although this was sensitive information usually subject to reporting restrictions, Netanyahu's direct disclosure is analyzed as an attempt to rally political support. This is interpreted as a strategy to strengthen internal cohesion amidst an unstable political situation.
In Israel, there is a political consensus that Iran's nuclear and ballistic missile development must be curbed, regardless of whether Prime Minister Netanyahu is replaced. Therefore, it is expected that a hardline stance against Iran will be maintained by whoever takes power next. This indicates that the Iran issue is a core concern for Israel's security.
Iran is likely to keep the Strait of Hormuz closed until it extracts significant concessions from the U.S. This is interpreted as a strategy to use the blockade as a powerful bargaining chip to elicit U.S. concessions. Through this, Iran also aims to raise oil prices, putting pressure on the international community and increasing its leverage in negotiations.
In the current situation, the U.S. believes it cannot subdue Iran by force and appears to have no other options besides concessions and negotiations. The U.S. is in a more desperate position, giving Iran the upper hand in negotiations. Iran is focusing on issues of control over the Strait of Hormuz and revenue sharing. If the U.S. does not show flexibility, a ceasefire seems unlikely.
Oman is showing signs of moving away from its past cooperation with the U.S. by pursuing a joint imposition of tolls on the Strait of Hormuz with Iran. Oman was initially passive due to Iranian pressure but is analyzed to have shifted to an active stance after recognizing the economic benefits. The U.S. has expressed strong disappointment over Oman's change of attitude.
If a toll of about $1 per barrel, as previously discussed, were actually introduced in the Strait of Hormuz, fuel prices in South Korea would inevitably increase by approximately 10 won per liter. Although no confirmed amount exists currently, there are analyses suggesting even higher tolls are being discussed recently. The economic ripple effect will intensify once the final toll and the Iran-Oman revenue-sharing ratio are determined.
If ceasefire negotiations fail, the U.S. has warned of a maximum pressure strategy against Iran. As Scott Bessent mentioned, it is highly likely to involve specific financial institution sanctions, and pressure will escalate through phone calls to leaders of relevant countries seeking cooperation. The reactions of key countries such as China, Malaysia, Indonesia, India, Turkey, and Qatar in this process will be closely watched.
President Trump's proposal for a ceasefire with Iran is analyzed to be heavily influenced by deteriorating U.S. economic indicators and the upcoming midterm elections. Trump is particularly sensitive to the 10-year Treasury yield exceeding 4.7% and is attempting to resolve the Iran issue to secure an election victory amidst sluggish economic performance. Given that U.S. voters prioritize domestic economic issues like inflation over the Iran problem, Trump's urgency is reflected in this proposal.
If a final agreement with the U.S. falls through, the worst card Iran could play is withdrawing from the NPT (Treaty on the Non-Proliferation of Nuclear Weapons). There are reports that Iran is internally preparing the language for an NPT withdrawal. This suggests a risk that Iran could go all-in and take a hardline stance, a scenario that could have significant repercussions for the international community.
Regardless of the midterm election results, there are concerns that President Trump may further intensify pressure on Iran after the election. The scenario of resuming military attacks, considering weapon stockpiles, cannot be ruled out. However, experts point to the limitation that it is difficult to subdue Iran without ground combat, questioning the effectiveness of military solutions.
Having overwhelming military power does not guarantee desired outcomes in all international disputes. As seen in past cases like the Vietnam War or the Soviet invasion of Afghanistan, simple military superiority does not assure ultimate victory. In particular, a ground war with Iran would inflict immense casualties on U.S. forces, making it an unrealistic military option.
President Trump is expected to implement secondary boycotts targeting allied nations to intensify pressure on Iran. This would manifest as strong demands for allies to cease all transactions with Iran. As exemplified by the closure of Iran's Bank Mellat and demands to halt transactions with South Korean companies, there is a risk that pressure could extend to general companies not explicitly subject to sanctions.
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