Wars often end on the battlefield. Lasting peace, however, is built through trade, investment and shared economic interests.
Photo: Pravda.Ru by Petr Ermilin, https://creativecommons.org/public-domain/pdm/
War with Iran
That may prove to be the enduring significance of the memorandum of understanding signed by the United States and Iran after more than three months of conflict. While attention has focused on sanctions relief, nuclear commitments and regional security, the agreement’s most consequential feature may be its attempt to create an economic incentive for lasting peace in the volatile Middle East.
Russia was among the first major powers to welcome that direction.
During a telephone conversation with Iranian Foreign Minister Abbas Araghchi, Russian Foreign Minister Sergey Lavrov expressed support for the understandings reached through the mediation efforts of Pakistan and Qatar and stressed the importance of compliance by all parties, including Israel. Moscow also reaffirmed its readiness to contribute its diplomatic experience to efforts aimed at resolving the Iranian crisis, underscoring its continued preference for de-escalation through diplomacy.
The economic logic behind the agreement is compelling.
At its centre is the reopening of the Strait of Hormuz, one of the world’s most strategically important maritime corridors. According to the International Energy Agency (IEA), nearly 15 million barrels of crude oil per day, representing about 34% of global seaborne crude trade, transited the strait in 2025. The waterway also carried about one-fifth of global liquefied natural gas (LNG) exports, predominantly from Qatar, with nearly 83% destined for Asian markets.
When the conflict disrupted shipping, the consequences spread rapidly beyond the Gulf. Oil prices climbed, shipping insurance premiums rose and global supply chains faced renewed uncertainty. For economies already grappling with inflation and slowing growth, the disruption demonstrated how closely geopolitical stability and economic performance are intertwined.
The memorandum seeks to reverse that trend by restoring navigation through Hormuz and allowing Iranian oil exports to resume while broader negotiations continue. The IEA’s latest market outlook projects that, following the recovery of flows through Hormuz, global oil supply could expand by about 8 million barrels per day by 2027, significantly outpacing demand growth and helping rebuild depleted inventories. That would improve energy security, moderate price volatility and provide welcome relief to the global economy.
Equally important is the agreement’s economic architecture.
The framework envisages a proposed US$300 billion Reconstruction and Development Fund, backed entirely by private-sector investment and intended to finance projects in energy, logistics, transport and manufacturing once a comprehensive settlement is reached. Rather than relying solely on political commitments, the agreement seeks to create powerful commercial stakeholders whose long-term interests are tied to regional stability. Investors, shipping companies, infrastructure developers and energy firms all stand to gain more from peace than renewed conflict.
The potential dividends extend well beyond Washington and Tehran.
Asian economies could benefit from lower energy costs and more reliable supplies. Gulf producers regain secure access to international markets. European manufacturers stand to benefit from lower fuel costs and reduced shipping risks. Financial markets also tend to reward geopolitical stability by lowering uncertainty and encouraging long-term investment.
Russia’s interests fit naturally within this broader picture.
As one of the world’s leading energy exporters, Russia has increasingly redirected its oil exports towards Asian markets in recent years. Stable global energy markets, secure maritime trade routes and stronger Asian demand support long-term planning for both producers and consumers. Lavrov’s conversation with Araghchi reflects that strategic reality. For Moscow, as for many other capitals, regional stability is no longer solely a diplomatic objective but an economic one.
The agreement remains fragile. Difficult negotiations over Iran’s nuclear programme, sanctions relief and regional security arrangements still lie ahead. The proposed investment framework itself depends on the successful conclusion of a comprehensive settlement.
Yet one conclusion is already emerging. The memorandum is more than a ceasefire. It represents an attempt to anchor peace in economic self-interest by linking diplomacy with energy security, investment and trade. If that approach succeeds, its greatest achievement may not simply be ending one conflict, but demonstrating that economic interdependence can become a durable instrument of peace in one of the world’s most strategically important regions.
Dr. Hriday Sarma is an Indian lawyer and independent researcher specializing in energy affairs across Greater Eurasia.
