The week begins with the most promising development in US-Iran peace talks yet, a UK-Japan investment agreement worth £18bn and the G7 leaders’ summit taking place in France.
US-Iran ‘breakthrough’?
Iran and the US have announced an agreement to end the war they’ve been fighting since the end of February, mediating officials from Pakistan have announced.
A framework for peace has been agreed, with the 8 April ceasefire – which has been under strain from missile strikes from both sides – to be extended for an additional 60 days, the BBC reports.
The deal is set to be signed on Friday (19 June) in Switzerland, Pakistan has said.
Donald Trump said the ceasefire agreement was “now complete” and claimed the Strait of Hormuz would be reopened.
“Oil will flow on both ends again for the Region, and the World,” he wrote in a post shared on social media.
Iran’s Supreme National Security Council said that the text of the memorandum had been finalised and that it will “permanently and immediately on all fronts, including in Lebanon”.
Although Israel accepted the ceasefire, leader Benjamin Netanyahu made clear in his statement that the deal was Trump’s doing. Israel has struck southern Lebanon, claiming to target operatives from Iranian proxy group Hezbollah, during the ceasefire.
Iranian state media and US President Donald Trump have confirmed that the agreement will see the US naval blockade of Iranian ports removed.
One Republican senator said he was “somewhat concerned” by Iran’s interpretation of the deal. Senator Lindsey Graham said that “Iran’s view of the agreement seems different than what the American negotiating team is claiming”.
Oil markets were buoyed by yesterday’s announcement though, with the Brent Crude benchmark for oil pricing falling to US$84.02 after months tracking over US$100 per barrel.
Strait of Hormuz
As part of the agreement US President Donald trump said that the Strait of Hormuz will be opened toll-free. He said yesterday evening (14 June) that he “authorised” the opening of the strait and the removal of the US blockade of Iranian ports. However, he later clarified that this would be contingent on deal being signed on Friday.
However, the Guardian notes that Pakistan’s prime minister Shehbaz Sharif didn’t mention the strait in his announcement, while Iranian state news reported that the reopening would be subject to “Iranian arrangement” and needed to take place within 30 days.
Describing the deal as a “breakthrough”, UK prime minister Sir Keir Starmer said that the UK and France would support the reopening of the Strait of Hormuz, including through mine clearance operations. He added:
“We are clear that toll-free freedom of navigation must now be restored in the Strait of Hormuz, to begin easing the severe economic impacts that have been felt for several months – on families here in the UK and around the world.”
The UN International Maritime Organization’s secretary general Arsenio Dominguez welcomed the agreement, saying that it “signals a crucial return to peace, dialogue, multilateralism and diplomacy”.
He also described it as an “important step toward restoring safety in this vital maritime corridor for seafarers and ships, as well as safeguarding the fundamental principle of freedom of navigation.”
UK-Japan
Ahead of this week’s G7 summit, Starmer welcomed Japanese counterpart Sanae Takaichi to Downing Street to agree investment worth £18bn.
According to a press release from the PM’s office, tens of thousands of jobs will be created by commercial and government investment. The agreement will see £9bn invested in infrastructure and financial services, with up to £9 billion in offshore wind.
A technology partnership will also deepen cooperation in areas such as AI, quantum computing and semiconductors, while Rolls-Royce will further collaborate with Japan’s Atomic Energy Agency to develop next-generation nuclear technologies.
The agreements also establish a Defence Capability and Industrial Council, designed to accelerate the development of dual-use technology and supporting UK defence firms to access Japanese investment. This follows last week’s resignation of former defence secretary John Healey last week, who claimed the government was “unable” to fund its defence spending plan.
Starmer said:
“As G7 economies and close security partners, we are working together with Japan on some of the most innovative technology in the world, harnessing the best of British and Japanese research and industry to deliver growth and security to every corner of the United Kingdom.”
G7 meeting
The US, along with leaders from fellow G7 nations, the UK, Canada, Japan, Italy, Germany, will be heading to France this week for the 52nd leaders’ summit.
Working sessions over the course of the three-day event (15-17) will address issues such as protecting critical mineral supplies in the face of China’s monopoly on the vital resources.
A discussion on “trade tensions and widening imbalances” is also on the agenda, with French President Emmanuel Macron leading efforts among EU members to introduce greater powers to tackle dumping and subsidised goods from overseas.
Economist Agathe Demarais, who co-chairs the T7 group of experts that advises the G7 presidency, wasn’t optimistic that much would be achieved.
She told Politico that participants at Marcon’s video conference on the topic last week (11 June), including German Chancellor Friedrich Merz and Canadian Prime Minister Mark Carney, “found it hard to agree on much”. Regardless of this summit’s outcomes, she anticipated little cooperation from Beijing:
“Obviously China doesn’t have any interest in engaging with the G7 about this.”
Commentators have also raised concerns about Trump’s engagement with the summit, noting that Macron already postponed it to facilitate the US President’s 80th birthday celebration.
Despite the Iran peace deal, the reluctance of other G7 nations to support the military conflict have been flagged as a possible point of tension. German chancellor Merz went so far as to describe the war as a “humiliation” for the US.
Ahead of the summit, Politico also reported that Starmer’s position has been questioned by a number of attendee officials, although many have praised his performance as an international statesman, particularly his progress in forging closer ties with Europe.
Other news
· The BBC reports that the UK is set to reduce its target for Electric Vehicles sales, from 80% of all cars by 2030, to between 50% or 70%
· Make UK called on the government to do more to reduce the high energy costs faced by UK manufacturers, warning that job losses stemming from offshoring production could rock the sector
Other dates in the diary
Monday: G20 GDP growth data
Tuesday: The Chartered Institute’s Bristol regional roundtable
Wednesday: UK inflation data
Thursday: EU leaders meet to discuss Ukraine
Friday: Public sector finances and UK retail data published
Saturday: London Climate Action Week
Sunday: Summer solstice
