U.S.-Iran ceasefire deal draws cautious European welcome, leaves major issues unresolved

Iran had made an end to the violence in Lebanon, where Israel is fighting Iranian-backed Hezbollah militants, a condition for a deal, according to reporting on the agreement. Israel was not part of the negotiations regarding the U.S.-Iran deal, a notable omission given that Israeli operations in Lebanon were a central Iranian demand. The absence of Israel from the table leaves open the question of how the Lebanese front will be stabilised if and when the wider accord is implemented.

A deal mediated by Pakistan

The U.S.-Iran peace deal is intended to end more than three months of war in the Gulf, a conflict that has had significant ripple effects across global energy markets. Oil futures dropped 4% following Trump's announcement of the deal, reflecting traders' bets that a reopening of the strait would ease supply concerns. The Strait of Hormuz carried about 20 million barrels per day of oil in 2024, a figure equivalent to 20 per cent of global petroleum liquids consumption, underscoring why international leaders have pressed for its swift restoration.

Ursula von der Leyen praised the announcement of the Iran-U.S. ceasefire agreement, writing on the social media platform X that the deal should allow for the immediate reopening of the strait. "This agreement should allow for the immediate reopening of the Strait of Hormuz. Freedom of navigation must be restored toll-free," von der Leyen said. She emphasised that reopening the strait should be a priority, a position echoed by Kaja Kallas, who also praised the announcement, and by António Costa, President of the European Council. Together, the three European leaders stressed the importance of quickly easing the global energy crisis.

European leaders' reaction to the ceasefire announcement was characterised as cautiously welcoming or guardedly celebrated. While they endorsed the end of fighting, they made clear that substantial work remains before the agreement can be considered a lasting resolution. Von der Leyen, Costa and Kallas stressed the importance of quickly easing the global energy crisis, a concern heightened by months of disruption to traffic through the strait.

Europe's guarded welcome

Trump said the Strait of Hormuz will reopen for purposes of mine removal after the deal is signed on Friday, signalling an initial technical step toward restoring navigation. The deal's focus on mine clearance, however, leaves the broader political and economic arrangements governing the waterway for subsequent negotiations. In April, around 40 countries said they were ready to contribute a force to help reopen the Strait of Hormuz once fighting ends, a multinational commitment that could shape how the waterway is secured in the months ahead.

Reuters reported that a draft memorandum covered Tehran's nuclear programme, the reopening of the strait, sanctions relief and the release of frozen Iranian assets. The draft memorandum reportedly included the release of US$25 billion in frozen Iranian assets during a 60-day negotiation period, suggesting that the Friday signing is intended as a framework rather than a comprehensive settlement. Major questions about the future of Iran's nuclear and ballistic missile capabilities are therefore expected to be addressed in a subsequent phase of talks.

Mine clearance as a first step

Trump is heading to the French Alps for the G7 summit hosted by French Emmanuel Macron, where the Iran deal is set to top the agenda. Macron said the objective of the summit will be to see the consequences of the agreement, its support for Lebanon, the longterm reopening of the Strait of Hormuz, and an agreement on Iran's nuclear and ballistic weapons. "The objective will be to see the consequences of this agreement, its support for Lebanon, the longterm reopening of the Strait of Hormuz and of course an agreement on Iran's nuclear and ballistic weapons," Macron said.

Sanae Takaichi said her country "strongly hopes" that "free and safe navigation through the Strait of Hormuz will be ensured in practice," and that "a final agreement on Iran's nuclear issue and other matters will be reached as soon as possible." Japan's economy is heavily dependent on energy imports routed through the strait, and Tokyo's swift response underscored the international stakes in ensuring the waterway reopens fully and durably.

The G7 agenda

The G7 summit is hosted by French Emmanuel Macron, who has framed the gathering as a chance for the world's major industrialised democracies to coordinate on the next phase of the Middle East crisis. Macron's reference to Iran's nuclear and ballistic weapons suggests that the leaders will press for a follow-on negotiation track that goes beyond the ceasefire and the reopening of the strait. Whether that broader effort can produce a comprehensive settlement is the central question hanging over the deal.

European leaders responded on Monday to U.S. Donald Trump's announcement of a ceasefire agreement between Tehran and Washington, balancing relief at the end of hostilities with unease about the unresolved elements. Their guardedly welcoming tone reflected both the diplomatic value of the breakthrough and the recognition that the agreement is, as one official put it, a framework that defers the hardest decisions.

A critical gap in the current agreement is the role of Israel, which was not part of the negotiations despite Iran's insistence that an end to the fighting in Lebanon be part of any deal. Israeli operations against Iranian-backed Hezbollah militants in Lebanon were a central condition Iran set for joining the accord, and how that front will be governed going forward remains unclear. The omission of Israel from the talks raises questions about the durability of any broader regional calm.

Israel's absence from the table

The 60-day negotiation period referenced in the draft memorandum suggests that the Friday signing is the start of a longer diplomatic process rather than its conclusion. During that period, negotiators are expected to work out the details of sanctions relief, the release of frozen assets, and a follow-on framework for Iran's nuclear programme. The success or failure of those talks will determine whether the ceasefire is the opening chapter of a durable peace or simply a pause in hostilities.

Taken together, the deal's emphasis on reopening the strait, halting the blockade, and deferring the nuclear question reflects a classic conflict-resolution sequence: secure the most urgent humanitarian and economic gains first, then tackle the hardest political disputes. European leaders, Japanese officials and the broader G7 are now positioned to push for an ambitious follow-on track when they meet in the French Alps.