US-Iran talks in Switzerland overshadowed by Hormuz closure

[BUERGENSTOCK/DUBAI] US Vice-President JD Vance held peace talks with Iran at a Swiss resort on Sunday (Jun 21), though this was overshadowed by Teheran saying it had shut the Strait of Hormuz and would not discuss nuclear issues because Washington had failed to halt fighting in Lebanon.

The talks were the first to be held under the terms of a memorandum of understanding (MOU) agreed a week ago, which calls for the strait to be reopened and a halt to all hostilities, including in Lebanon, which US ally Israel invaded in March.

But with scant sign of an end to fighting there, Iran said on Saturday it had again shut the strait, whose closure for nearly four months caused the biggest disruption of global energy supplies in history.

It also said there could be no start to the next phase of substantive negotiations, including over its nuclear programme, until Lebanon fighting ends and it receives promised economic benefits.

US officials have disputed that the strait is closed and said that 55 merchant ships had crossed it on Saturday.

Yet, on Sunday, Iran’s Fars news agency cited a military source as saying that no new permits were being issued for ships to cross until further notice.

Commercially available tracking data suggested that Iran had indeed cut off the strait, with no crossings by ships that reported their positions – other than those serving Iranian ports – after Iran announced it was closed.

The Iranian and US delegations at the talks initially met Qatari and Pakistani mediators on Sunday ahead of the four-way meetings later in the afternoon.

Vance briefly appeared in front of travelling media as he, envoy Steve Witkoff and US President Donald Trump’s son-in-law Jared Kushner met Pakistani Prime Minister Shehbaz Sharif and Pakistan’s Army Chief Field Marshal Asim Munir.

SEE ALSO

Trump’s fears about economy undercut US leverage in Iran talks

Vance leaves shippers in the dark on potential Iran Hormuz toll

US, Iran envoys head for talks, Israeli strikes continue after ceasefire

Iranian Guards’ business empire to win big if US sanctions lifted

More

Warm greetings were exchanged; Vance said “What’s up man?” as he shook hands with Munir and hugged him. “My brother,” Munir said as he reached out to Witkoff and embraced him.

Oil prices could surge again

As often is the case with major developments potentially affecting the global economy during the war, the announcement that the strait was again shut took place on the weekend with markets closed, making it difficult to assess the impact.

US President Donald Trump said he agreed last week’s MOU to avert a global depression from high oil prices caused by shutting the strait.

Since the agreement was announced, oil prices have tumbled to levels unseen since the war started, but a return of Iran’s effective blockade could see them surge again when markets reopen on Monday.

Iran’s foreign ministry spokesperson, Esmail Baghaei, said that Sunday’s talks in the scenic Qatari-owned Swiss mountain resort of Buergenstock, involving mediators Qatar and Pakistan as well as Iran and the US, would last for just one day.

Since Washington had failed to guarantee a ceasefire in Lebanon, the talks would cover only the implementation of the MOU itself and not the substantive issues foreseen for the next stage of negotiations, Beghaei said.

Vance hopes for progress

The MOU foresees 60 days of talks on issues such as curbing Iran’s nuclear programme in return for the lifting of international sanctions.

Raphael Grossi, head of the International Atomic Energy Agency which is likely to be called upon to verify any nuclear deal, was also in Switzerland for the talks.

Even before substantive talks begin, Iran expects to receive economic benefits, such as sanctions waivers and the unfreezing of blocked assets.

President Masoud Pezeshkian, quoted by Fars, expressed optimism that talks with the US could provide a strong basis for economic growth. He said the first achievement of the negotiations was restoring access to some of Iran’s financial resources.

Before his departure, Vance told reporters: “I think we’re going to hopefully make progress on the nuclear issue, make progress on the Lebanon ceasefire issue.”

Ceasefires have been repeatedly announced in Lebanon, most recently on Friday, but appear to have had little impact so far on the fighting there, with more than a million people driven from their homes by Israel’s invasion.

However, in a possibly positive sign on Sunday, Reuters journalists in southern Lebanon saw some of the heaviest traffic since the MOU was signed, with residents returning to homes they had fled in the south. Some stood beside cars backed up on the highway and waved Hizbollah flags.

Twenty killed in Lebanon, authorities say

Reuters journalists in southern Lebanon also saw rescuers on Saturday carrying wounded at the sites of Israeli attacks, which have reduced swathes of Lebanese towns and villages to ruins of concrete rubble that residents say resemble the Gaza Strip.

Lebanese authorities said that 20 people were killed on Saturday, but there were no immediate reports of major violence on Sunday morning.

The army said on Sunday that specialised units were still working to dismantle unexploded Israeli bombs weighing 1,000 and 2,000 pounds that had been dropped on southern towns.

The army had opened some roads, but urged residents to delay returning to border villages and to follow instructions from soldiers to ensure safety amid ongoing Israeli attacks.

Trump’s memorandum to end the war, which he jointly launched alongside Israeli Prime Minister Benjamin Netanyahu in February, is deeply unpopular in Israel, which did not participate in the peace talks.

Netanyahu’s government has said that it will not withdraw from a swathe of Lebanon it seized after Hizbollah fighters fired across the border into Israel in solidarity with Teheran.

None of war objectives achieved

After Trump and Netanyahu launched the war, they said their aims were to destroy Iran’s nuclear programme, halt its ability to threaten neighbours with missiles and proxy forces, and make it possible for Iranians to topple the government.

None of those objectives has been achieved, although US officials say they inflicted severe damage on Iran’s military and still expect a strong agreement that will prevent Iran from obtaining a nuclear weapon.

A poll by Israel’s Hebrew University, provided to Reuters, showed about 92 per cent of Israelis believe Iran benefited more than Israel from the joint Israeli-US military campaign, while just 8 per cent see Israel as having emerged victorious.

Almost 90 per cent of Israelis said war goals had not been met and fewer than 30 per cent believe Netanyahu’s claims of major achievements. REUTERS