Iran Watch: Iran Deal – An Uneasy New Normal

The report examines the economic and geopolitical implications of a fragile US-Iran Memorandum of Understanding. It highlights the expected cooling of regional tensions while noting continued risks in Lebanon, Egypt, and energy shipping routes.

Key Takeaways

• 1.A draft US-Iran Memorandum of Understanding (MoU) provides a fragile near-term pause in regional conflict, potentially reducing stagflationary tail risks.
• 2.Regional economic impact varies: countries with low buffers (Iraq, Tunisia) or limited oil export capacity (Bahrain, Kuwait, Qatar) are set to benefit most from reduced tensions.
• 3.Egypt remains engaged with the IMF for its seventh review but seeks to reduce reliance on external funding via divestment and asset-for-debt swaps.

Table of Contents

• Iran Watch
• US-Iran deal – pause in a complex regional conflict
• Iran could preserve newly found regional influence
• Hormuz and Lebanon – a war of narratives
• Lebanon: dynamics could outlast Iran war
• Egypt: IMF in the cards but not beyond 2026
• Divestment and GFN key to complete upcoming IMF reviews
• Gulf countries: new policy priorities likely post-war
• Disclosures

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