Bianca Botes, Director at Citadel Global

Forty days of American and Israeli strikes on Iran came to a conditional halt on the night of 7 April, when United States (US) President, Donald Trump, announced a two-week ceasefire less than two hours before his own deadline for Iran to reopen the Strait of Hormuz or face the destruction of its entire civilian infrastructure. Mediated by Pakistan’s Prime Minister, Shehbaz Sharif and Army Chief General, Asim Munir, the announcement immediately sent oil into freefall and equity markets surging – but the ceasefire is already fraying and the gulf between both parties on a permanent settlement remains substantial.

Iran’s 10-point plan

Iran’s 10-point proposal, submitted via Islamabad and described by Trump as a “workable basis on which to negotiate,” sets out Tehran’s terms in full. The plan demands:

• A US commitment to non-aggression against the Iranian state
• Iranian control over passage through the Strait of Hormuz, managed through a formal secure transit protocol coordinated by its armed forces
• An end to all attacks on Iran and its regional allies
• The lifting of all US primary and secondary sanctions
• The release of frozen Iranian assets
• Formal recognition of Iran’s right to enrich uranium
• Full reparations for all war damages
• Complete withdrawal of US forces from the Middle East
• A halt to combat on every front – explicitly including Israel’s campaign against Hezbollah in Lebanon
• A UN security council resolution making any deal binding

The White House has confirmed that a different, condensed version of the plan formed the actual basis of the agreement, with Trump stating that “there is only one group of meaningful points acceptable to the United States” that would be discussed in Islamabad, where talks are scheduled to begin today, 10 April, with a US delegation led by US Vice President, JD Vance.

Ceasefire violations

Within hours of the ceasefire taking effect, accusations of violations were traded in both directions. Iran’s Parliamentary Speaker, Mohammad Bagher Ghalibaf, declared that three points of the proposal had already been breached, pointing primarily to Israel’s continued strikes in Lebanon – a condition Iran’s President, Masoud Pezeshkian, described as “essential” for the agreement to hold. Iranian state media briefly reported that the Strait of Hormuz was reclosed as a result.

From the other direction, Iran-aligned forces launched drone and missile attacks across multiple Gulf states on 8 April: Kuwait faced 28 drone strikes, the UAE 35, a fire was ignited at Abu Dhabi’s Habshan gas complex and a Saudi pipeline was directly hit. Qatar intercepted seven drones. Iranian state television confirmed the attacks, framing them as retaliation for prior strikes on Iranian oil infrastructure.

Washington’s response was blunt – Lebanon was never part of the deal and the US position on uranium enrichment – no enrichment, under any circumstances – had not moved.

The case for a deal

There is a genuine case for a deal from both sides. Trump is under genuine domestic pressure: US petrol prices have risen above $4/gallon, November’s midterm elections are approaching and six weeks of military action have not delivered a decisive outcome. Tehran, for its part, has absorbed serious infrastructure damage and has every incentive to negotiate sanctions relief and asset unfreezes.

While both governments have publicly claimed the ceasefire as a victory – Iran’s Supreme National Security Council called it “an enduring defeat for Washington,” and Trump declared it “total and complete victory” – the mutual face-saving creates enough political room for both to sit at a table. In addition, Pakistan’s credibility as a neutral mediator and the forum being held in Islamabad give the talks a workable structure.

A minefield of obstacles

The structural obstacles are harder to dismiss. Uranium enrichment is the most intractable issue on the table. Trump stated on 8 April that Iran will not be permitted to enrich uranium and that the US will work with Iran to “remove all deeply buried nuclear dust.” Tehran’s publicly released plan demands the explicit opposite. In addition, a US withdrawal from regional bases, reparations payments and formal Iranian sovereignty over the Strait are non-starters in Washington, regardless of who leads the delegation.

Lebanon is also a fault line: Iran calls it a precondition; Israel says it falls outside the deal entirely; and Washington appears unable or unwilling to constrain Israeli operations long enough to test Iran’s willingness to strike a deal. Iran has gone as far as saying it will not attend peace talks if Israel continues to strike Lebanon and the trust deficit runs deep; Iran’s Supreme National Security Council warned that “should the slightest error be committed by the enemy, it shall be met with full force.”

The market stakes

For markets, the stakes are direct and measurable. On the ceasefire announcement, Brent crude fell 13.3% to $94.75/barrel – its sharpest single-day decline since the pandemic – while West Texas Intermediate dropped 16.4% to $94.41/barrel, posting its biggest one-day loss since April 2020.

The US’s Dow gained over 1,300 points, its best session in a year; the S&P 500 added 2.5% and the Nasdaq 2.8%. Japan’s Nikkei gained 5.4%, the South Korean KOSPI 6.9% and Germany’s DAX surged 5.1%. The VIX volatility index fell 22%. But oil remains well above the $73/barrel pre-war Brent level and as breach accusations emerged on 9 April, Brent rebounded 2.8% to $97.42/barrel.

Global economy holds its breath 

The oil backlog inside the Gulf is substantial: 187 tankers carrying 172 million barrels remain stranded. Qatar’s Ras Laffan LNG complex – responsible for roughly 20% of global liquefied natural gas production – is running at 17% below capacity following infrastructure damage. Total regional energy infrastructure rebuild costs are estimated by Rystad Energy at over $25 billion.

If Islamabad collapses and hostilities resume, oil will immediately be back above $110/barrel, global inflationary pressure will be reignited, central banks will face renewed pressure to hold rates higher for longer and risk-off sentiment will push emerging market currencies – including the rand – sharply weaker.

The ceasefire through South Africa’s lens

If a deal is reached, even a phased one, the prize is a gradual return toward pre-war oil price levels as the tanker backlog clears. An emerging market relief rally, lower South African fuel and import cost pressure and the prospect of the South African Reserve Bank (SARB) recovering meaningful policy flexibility will give South Africa a boost to remain on track for the meaningful structural reform that started last year.

The next two weeks will determine which path the global market takes. We will be watching every headline closely.

ENDS