War returns to Iran with Israel, US strikes

Gold prices were steady, near a one-week high, as investors awaited further details on the US-Iran agreement and the Federal Reserve’s policy decision from Kevin Warsh’s debut meeting as Chair, Reuters reports.

Spot gold was flat at $4,331.29 per ounce, as of 0420 GMT. US gold futures for August delivery was down 0.1 per cent at $4,351.40.

Oil prices inched lower, extending the previous session’s declines as investors assessed the US-Iran peace deal, though uncertainty over the full resumption of shipping through the Strait of Hormuz limited further falls, Reuters reports.

Brent crude futures dipped 16 cents, or 0.2 per cent, to $78.80 a barrel by 0340 GMT, while US West Texas Intermediate fell 25 cents, or 0.3pc, to $75.80 a barrel.

Both benchmarks fell about 5pc for a second straight session on Tuesday to stand at three-month lows, on hopes that a US-Iran deal would allow oil flows through the Strait.

“Markets are broadly stripping out the embedded geopolitical risk premium in oil prices,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.

Higher fuel costs due to the Middle East war are widening Vietnam’s first-half trade deficit to around $15 billion, though exports are expected to accelerate in the rest of the year and narrow the gap, Deputy Finance Minister Nguyen Duc Chi said, according to Reuters.

The country will stick to its 10 per cent GDP growth target despite challenges, Chi said.

Australia has relaxed its travel advice for several Middle Eastern countries, allowing Australians to transit through and travel to the biggest Gulf air hubs with the security of being covered by insurance, Reuters reports.

Foreign Minister Penny Wong said the previous “do not travel” advisory had been lowered for the United Arab Emirates, Qatar, Bahrain, Israel and Kuwait after the US and Iran reached an interim deal to end the war.

She said the advisory had moved to “reconsider your need to travel” to those countries, as the security situation could still deteriorate rapidly with little warning.

The removal of the “do not travel” warning is positive for Gulf airlines. They had carried more than half of all passengers flying from Europe to Australia, New Zealand and Pacific Islands before the war began in late February, according to aviation data firm Cirium.

In a dramatic turn of events, the US and Iran have agreed on a framework for peace talks. While the details of the deal, reached after months of intense backchannel negotiations mediated by Pakistan and supported by other regional countries, have yet to be made public, this development has raised hopes of ending an irrational war that the US has lost. The tentative pact provides a space of 60 days to conclude a comprehensive peace agreement that remains a significant challenge. There’s still a long way to go before such an agreement is reached.

There has been a noticeable shift in President Donald Trump’s previously aggressive tone; however, several complex issues need to be addressed during this period. These include deferred nuclear talks, the future governance of the Strait of Hormuz, the release of frozen Iranian assets and the lifting of the sanctions on Iran. Meanwhile, Israel’s refusal to participate in the process and its ongoing invasion of Lebanon could undermine peace negotiations.

Bringing the two adversaries to the negotiating table has been a challenging diplomatic task for Pakistan. Support from regional countries has significantly helped Pakistan in this painstaking process. Although no breakthrough occurred during the first round of peace talks, known as the Islamabad Talks, held in April, the meeting helped diplomatic channels remain open. Pressure was also placed on the Trump administration by the Gulf countries to end the war, which has profoundly impacted the region. Building trust between the two sides remains a significant challenge.

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Iranian oil tankers have exited the zone in the Gulf blockaded by the US Navy, the TankerTrackers website said, calling it the country’s “first crude oil exports in two months”, AFP reports.

“At least two National Iranian Tanker Company (NITC) VLCC supertankers named DIONA (9569695) and HERO2 (9362073) have exited the US Navy blockade perimeter carrying a combined total of 3.8 million barrels of Iranian crude oil between them,” TankerTrackers said in a post on X, citing digital tracking data corroborated by satellite imagery.

The site — which monitors oil shipments and storage — later added that a third NITC tanker had “exited the blockade line with 1 million barrels of Iranian crude oil”.

Elon Musk’s artificial intelligence tool Grok was used in strikes against Iran, the United States government revealed in a legal briefing seen by AFP.

The June 15 brief defends the gas turbines used by a giant data centre belonging to the trillionaire’s company xAI, which are the target of an environmental lawsuit.

In the brief, the US Department of Justice argued that the lawsuit “threatens American national, economic, and energy security by seeking to shut off the power supply for artificial intelligence innovation that supports the Department of War’s military operations”.

To support the argument, federal prosecutors presented testimony from Pentagon AI chief Cameron Stanley in which he states, under oath, that Grok is already in use within Project Maven, the US military’s AI-assisted targeting program that was initially powered by Anthropic’s Claude model.

The project’s Maven Smart Systems “enabled US forces to deploy over 2,000 munitions to 2,000 distinct targets within 96 hours during Operation Epic Fury,” Stanley’s statement said.

The US vice president has said that Iran could experience “real benefits”, but only if “they fundamentally transform themselves”, according to AlJazeera.

“The agreement is actually very simple. It says one: Iran can’t have a nuclear weapon; two: the Straits of Hormuz are open; and number three: there are all of these benefits contemplated that the Iranians can get, if they behave,” Vance said, in an interview to Fox News.

“If they stop funding terrorism, if they stop supporting the rebuilding of the nuclear arms programme, they actually can get some real benefits. If they don’t do any of that stuff, they don’t get anything,” he said.

“The United States wins either way,” Vance added.

United States President Donald Trump has invoked the Defence Production Act to address constraints in the production of munitions, according to a presidential memo, CBS News reports.

According to the report, the memo delegates the defence secretary to use the Defence Production Act, which can be used to jumpstart production of key items.

“The memo says the mechanism is warranted because fragile supply chains and production bottlenecks may ‘impair the ability’ for the US to expand the availability of munitions, missiles and equipment required for the national defence,” the report said.

Pope Leo has praised the interim deal between the United States and Iran to end the regional war in the Middle East, saying “thanks be to God” that the two powers are set to formalise their accord on Friday, Reuters reports.

Leo, who drew the ire of US President Donald Trump after criticising the Iran war, expresses hope that the deal will end the conflict for good.

“There will still be several points to settle, but it is always better to do so through dialogue, through negotiations, and not by returning to war,” the first American pope tells journalists outside his residence in Castel Gandolfo, Italy.

“I hope that it truly is a solution to the war, that the war really is over, and that we can move forward,” he adds.

Iran’s Khatam Al-Anbiya military command has highlighted that despite US President Donald Trump announcing a deal with Tehran, Israel has “violated the ceasefire in southern Lebanon 84 times over the past two days”, according to state broadcaster Press TV.

“It is warned that if the child-killing army of the Zionist regime (Israel) does not stop its mischief in southern Lebanon, it should expect a hard response from the powerful armed forces of the Islamic Republic of Iran,” the broadcaster reports.

US President Donald Trump has suggested that Israel let Syria “take care of Hezbollah” in Lebanon, Anadolu reports.

Speaking to the reporters in France, Trump says, “The man that’s running Syria now is a person that I put there,” and is “very responsible for Syria”.

“Along with [Turkish] President [Recep Tayyip] Erdogan and some others, he’s doing an amazing job of pulling it together,” he adds “He’s not a Boy Scout, but he’s done an amazing job of pulling it together, and he is very good.”

Criticising Israel’s stance in Lebanon, Trump also says he suggested that Israel allow Syria to confront Hezbollah instead.

“I suggested to Israel to let Syria take care of Hezbollah because, to be honest with you, I think they’d do a better job of doing it,” he says.

“If Israel can’t do the job (against Hezbollah) without killing everyone else, then [Sharaa] will do the job. Syria will do the job,” he adds.

Despite a ceasefire barely a few days old, hostilities in southern Lebanon continue to erupt.

“In the Nabatieh axis, the Israeli army is, according to security sources, trying to occupy more areas,” Al Jazeera’s Zeina Khodr reports from the city. “Israeli drones haven’t left the skies … Israeli officials have made it clear they are not happy with the US-Iran deal that includes a ceasefire in Lebanon.”

Residents like Mohammed Nasser have returned only to check on their properties.

“This is a decades-old conflict with Israel … an enemy that can’t be trusted … and we can never feel safe,” he tells Al Jazeera.

“The Israeli army is trying to occupy positions that it once held during their occupation of southern Lebanon in the 1990s, but the resistance is preventing them from doing so,” resident Hussein Badreddine tells Al Jazeera.

Ebrahim Azizi, the head of the Iranian parliament’s National Security Committee, says that Washington has to earn Tehran’s trust by “faithfully implementing all the provisions of the memorandum of understanding”, including ending the war in Lebanon and ensuring the withdrawal of Israel from the country.

“Any breach of commitment or departure from the core framework of the agreement will prompt Iran’s armed forces, backed by the brave Iranian nation, to respond more firmly and forcefully than ever before,” he warns in a post on X.

“This is a message to the entire world: the era of greed and trampling on the rights of the Iranian people is over.”

Germany ⁠is prepared to participate in helping to preserve ⁠peace in the Middle East following ⁠an interim deal between Iran and the US to end ‌the war in the region, Al Jazeera reports quoting Chancellor Friedrich Merz.

“We have always said that we ⁠are ready to ⁠play our part. Indeed, we have already sent the ⁠first mine-clearing boats ⁠or ships to the ⁠region,” he says at the G7 summit.

Global oil prices have tumbled more than 5 per cent as speculation mounts that sanctions on Iranian crude could be eased as part of the deal to end the Middle East war, AFP reports.

Around 1650 GMT, the international benchmark Brent crude fell 5pc to $79 a barrel. The US benchmark, WTI crude, tumbled 5.9pc to $75.97 a barrel.

Iran’s Foreign Minister Abbas Araghchi and his Omani counterpart, Badr bin Hamad Albusaidi, have affirmed their two countries’ commitment to uphold international law regarding navigation in the Strait of Hormuz, Al Jazeera reports citing the Oman News Agency.

As the US and Iran prepare to sign a memorandum of understanding later this week, “the two ministers renewed their countries’ commitment to the rules of international law regarding the safe and free passage of maritime navigation through the Strait of Hormuz”, the agency reports.

During the phone call, the two leaders have expressed “their hope that the upcoming phase will witness serious and diligent efforts from all parties to ensure a supportive and sustainable environment for an effective and constructive political and diplomatic path, thereby preserving the region’s security and stability”.

The son of the ousted shah of Iran has spoken out against any deal with Iran that leaves the Islamic government in place, as Washington prepares to sign an agreement with Tehran, AFP reports.

Speaking after meeting MPs during a visit to London, 65-year-old Reza Pahlavi says the international community should back opposition protesters rather than making peace with Iran.

“Dealing with this regime will fail and we will all face the consequences,” he declares in a social media post. “The regime’s 47-year war against the Iranian people continues. Just as it has never made peace with its own citizens, it will never truly make peace with the world.

“Any agreement that preserves this regime or its remnants will fail. The Iranian people will not accept it,” Pahlavi warns. “With or without international support, the people of Iran will overthrow this regime. Freedom will come to Iran.”

The US will allow Iran to immediately begin selling oil and fuel under the memorandum of understanding the two sides have reached to end the Middle East war, Reuters reports citing The Wall Street Journal, which cites people familiar with the agreement.

Lebanese state media says Israeli strikes killed at least four people in the Nabatieh area of the country’s south, despite an announcement that a US-Iran deal included the Israel-Hezbollah war, AFP reports.

The official National News Agency (NNA) says Israeli drone strikes targeted two vehicles in the town of Mayfadoun and another in nearby Shukeen, “leading to an initial toll of four dead” and others wounded.

While the violence has declined in Lebanon since the agreement between Washington and Tehran was announced, Israeli strikes on the south have now killed at least five people since Monday, according to NNA.