U.S. And Iran Enter Technical Talks To Secure Peace Deal, Restart Shipping

DOHA/DUBAI/WASHINGTON, July 1 (Reuters) – The United States and Iran held indirect technical talks in Doha on Wednesday to reach an agreement on the flow of ships through the Strait of Hormuz and establish a permanent ceasefire, a source with direct knowledge of the talks and an Iranian official said.

The talks are based on a 14-point interim agreement signed last month that aims to stop the war that began with the US-Israeli attack on Iran in February, reopen the strait and initiate 60-day negotiations for a permanent peace deal.

However, the United States and Iran have publicly argued over the meaning of the interim agreement; That led to tit-for-tat military strikes last week and left little sign of progress on more complex issues, including Iran’s nuclear program.

Iran is determined to have international recognition of its control over the strait and its ability to charge ships entering or leaving the Gulf, even if it has to do so by force, according to two senior Iranian sources.

Traffic has partially resumed through the waterway, which before the war accounted for one-fifth of global oil and liquefied natural gas trade.

U.S. President Donald Trump, who has said removing Iran’s highly enriched uranium is a top priority, told reporters on Wednesday that “Iran’s denuclearization is progressing well,” without providing details.

“They had very good meetings and we will see,” he said of the talks in Doha, where there was no evidence that the nuclear issue had been discussed yet.

The Iranian official said that indirect talks, mediated by Qatar and Pakistan, started on Tuesday night and continued on Wednesday.

The source with knowledge of the talks stated that the talks were structured as sessions between chief negotiators and experts, and said that Trump’s son-in-law Jared Kushner and ambassador Steve Witkoff met with the Qatari prime minister to lay the groundwork for the negotiations, but would not attend.

Kushner and Witkoff later met with the emir of Qatar to discuss US-Iran negotiations and developments in Lebanon, where a parallel conflict broke out between Israel and the Iran-backed militant group Hezbollah in early March.

Iranian Deputy Foreign Minister Kazem Garibabadi headed a delegation consisting of representatives from the Iranian foreign ministry, central bank and agriculture ministry, and met with the Qatari prime minister and held talks with mediators.

Iran has publicly stated that its priorities are reaching an agreement on the management of the strait and the release of Iran’s $6 billion in frozen assets, and the Iranian official said that the current round of discussions will focus on these two issues.

A source with knowledge of the talks said the US’s stated priority was to ensure free traffic flow in the strait.

A foreign container ship ran aground in the Strait of Hormuz after entering shallow waters outside the shipping route designated by Iranian authorities, Iranian state media said on Wednesday.

“Hormuz continues to reopen but is uneven, unpredictable and not entirely transparent,” said Vandana Hari, founder of oil market analysis provider Vanda Insights.

The war triggered Iranian attacks on Gulf countries hosting US military bases, killing thousands of people, primarily in Iran and Lebanon, and also causing oil and fuel prices to rise.

Trump faces domestic pressure to contain the economic fallout of the war ahead of midterm elections in November and criticism from his own party that the interim deal leaves U.S. goals unmet.

In Iran, the theocratic leadership survived the war but faced internal anger over a shattered economy.

Oil prices fell further on Wednesday; U.S. West Texas Intermediate crude hit its lowest level since Feb. 27, a day before the start of the war, at just under $69 a barrel.

The interim agreement between the United States and Iran also envisions an end to the conflict in Lebanon.

The United States supported a separate negotiation process between Israel and the Lebanese government that produced a framework security agreement that Hezbollah rejected and that analysts warned could solidify Israel’s occupation of southern Lebanon.

A source with knowledge of the talks said that there were intense diplomatic activities on Lebanon between the parties, including the USA, until Tuesday evening.

(Reporting by Reuters bureaus, Writing by Aidan Lewis, Editing by Alexandra Hudson)