“Ships of the world, start your engines,” President Donald Trump urged Sunday, on Truth Social. “Let the oil flow!” He was writing after announcing an apparent deal with Iran to halt the ongoing war and reopen the Strait of Hormuz, a choke point in global supply chains which the Iranian regime has largely blocked since the United States and Israel began their bombing campaign at the end of February. The terms of the initial memorandum of understanding were leaked in the media and later corroborated by U.S. officials. The memorandum also provides for an end to the U.S. blockade of Iranian ports and vessels, and an over-all cessation of hostilities, including in Lebanon, which is in the grip of an Israeli invasion. In the early phase of the war, Trump said he was gifting Iranians a chance to overthrow their theocratic rulers, but, though weakened, the regime remains in place, as does its arsenal of ballistic missiles and other offensive capabilities. Over the weekend, Trump told the Wall Street Journal that he “never cared about regime change” and that the current leadership in Tehran marked “the most rational group yet.” According to the leaked draft, Iran will vow not to pursue nuclear weapons, a reiteration of a pledge made many times before. Reports also suggest that Iran expects to receive, through some unspecified payment mechanism, potentially hundreds of billions of dollars in de-facto reparations for damage caused by the war. A number of regional intermediaries, including Pakistan and Qatar, helped broker this framework agreement, which was reportedly signed by Trump and Iranian officials on Wednesday, two days before an announced signing ceremony in Switzerland was supposed to take place. Israel appears to have been sidelined as the truce was worked out, much to the chagrin of its political leadership.

Early on Wednesday, a joint communiqué from the members of the Group of Seven (G-7) at a summit in Évian-les-Bains, France, which Trump attended, hailed the “historic opportunity” presented by the agreement and indicated that it is “ready to contribute to its implementation.” Later in the day, the President told reporters about the agreement, “Nobody knows what it is but it’s very strong.” But the agreement isn’t final, he said, adding, “It’s a memorandum of understanding and, if I don’t like it, we’ll go back to shooting at them, dropping bombs on their head.” Apparently, he did like it, given the reports of its signing. Still, it’s difficult to see what’s emerging as anything other than a humiliating climbdown for a President who started a war of choice vowing to transform the Middle East. Instead, the war and its aftermath may represent a defining failure for Trump’s foreign policy—one that may even have strengthened Iran in the region. The U.S. and Iran are supposed to spend the next two months working out the details of a wider agreement regarding the latter’s nuclear program. If they reach any broader settlement, it’s doubtful that its terms would be superior to what was reportedly on offer right before the war began, or to what was established by the Joint Comprehensive Plan of Action—the 2015 nuclear deal forged by President Barack Obama with other world powers, which Trump scrapped during his first term.

During the three and a half months since the start of war, American and Israeli air strikes hit hundreds of targets in Iran in dozens of cities, killing at least thirty-four hundred people, injuring thousands more, and destroying or damaging civilian infrastructure, including universities, schools, and water facilities. Israel’s parallel operations in Lebanon, to punish Iran’s proxy Hezbollah, have killed even more people and displaced close to a fifth of the population. Iran’s reprisals hit targets across the region, wounding hundreds and grounding flights in the big cities of the Gulf. A return of some degree of stability would, of course, be a relief, but even many who supported Trump at the start of the war are frustrated by the course of events. Some Iranian dissidents feel abandoned by a White House that once embraced their cause. Washington hawks who seemed content for the President to disregard Congress in rushing to war are now demanding more congressional scrutiny over the terms of a future peace. And, in Israel, both Prime Minister Benjamin Netanyahu’s opponents and his coalition partners see the developments as a disaster for Israeli national-security interests, with Hezbollah still standing in Lebanon and the Iranian regime not just standing but newly emboldened.

The war has always been unpopular in this country. Close to sixty per cent of American adults surveyed by Pew believe that the U.S. made the “wrong decision” in attacking Iran. In May, Pentagon officials estimated the war had already cost U.S. taxpayers some twenty-nine billion dollars. Around the same time, the Washington Post reported that the U.S. had used up much of its inventory of advanced missile-defense interceptors, expending more of these munitions in defense of Israeli territory than Israeli forces had themselves. In April, Tom Fletcher, the United Nations’ humanitarian chief, noted that the sums being spent by the U.S. on its “reckless war” could fund the U.N.’s “plan to save eighty-seven million lives” in dire humanitarian need around the world.

Whatever hardships Americans may have endured—including higher gas prices and creeping inflation—far greater ones have been felt elsewhere. The downstream impact of the conflict has been acute in Asia, Europe, and Africa, where there is far greater reliance on fossil fuels coming from the Persian Gulf, and greater vulnerability to the soaring costs of energy, fertilizers, and industrial chemicals exported from the region. Fatih Birol, the head of the International Energy Agency, said in April that the combined oil-and-gas crisis was more grave than the oil shocks of the nineteen-seventies, and that “the world has never experienced a disruption to energy supply of such magnitude.”

To deal with surging prices and diminishing reserves, some countries have implemented policies to ration cooking gas and gasoline. Others, such as Pakistan and the Philippines, have shuttered businesses and schools and tried to mandate working from home. Supply chains for plastics, fertilizers, and other vital supplies have also been blocked. The resulting costs to productivity will take a while to gauge. But, earlier this month, the Organisation for Economic Co-operation and Development, which is made up of thirty-eight advanced economies around the world, forecast that global growth is now expected to slow from 3.4 per cent in 2025 to 2.8 per cent in 2026, a contraction caused primarily by the effects of the war. An analysis by the Institute for Economics and Peace, a nonpartisan think tank headquartered in Sydney, forecast that a resumption of hostilities with Iran could cost the global economy some $2.2 trillion. The U.N. warned that spiking costs could drive forty-five million people around the world into acute hunger if the war continues through June.

The reopening of the strait, moreover, won’t provide an immediate panacea. The International Transport Workers’ Federation, which represents many of the sailors who are stuck aboard ships stalled in the Persian Gulf, said that “the backlog of stranded vessels and the need for crew changes and rest, mean a realistic return to normal shipping patterns is weeks, if not months, away.” In a memo this month, analysts at the Dutch multinational firm I.N.G. described the impact on fertilizer and food markets as “a tragedy unfolding in slow motion.” They acknowledged that a truce could lead to a resumption in flows of some goods, but warned that “the outlook is likely to remain fragile as a more permanent deal could be challenging to secure.” The markets have to price in the unpredictability and the volatility that have characterized Trump’s approach so far.

The chaos has compounded existing difficulties for poorer or developing economies, many of which were already wracked by public-debt crises that deepened in the aftermath of the COVID pandemic. “The global economy is not falling off of a cliff, but it has downshifted sharply and many developing economies are entering this shock with thinner buffers and fewer shock absorbers,” Ayhan Kose, the World Bank’s deputy chief economist, said last week. David Miliband, the head of the International Rescue Committee (I.R.C.), describes “shock absorbers” as the sorts of groups in civil society, in addition to state institutions, “that catch people when they fall.” They could be “a health service that’s able to isolate you if you’ve got Ebola” or “a cash-support scheme in Lebanon that’s able to support you for more than a month for a war that’s gone on for three months,” he told me. But there are fewer such services now, not least because many of the wealthiest nations have slashed their commitments to international aid; Oxfam calculated that the G-7 countries alone cut their aid budgets by a collective forty-eight billion dollars between 2024 and 2025—the largest reduction of its kind in history. Most of this drop was caused by the Trump Administration’s destruction of U.S.A.I.D., under DOGE, but other nations didn’t try to fill that void; instead, they quietly followed suit.

Trump’s move dislodged what Miliband called “an anchor” in the global humanitarian system. “If you pull up the anchor in choppy seas, the boat rocks backward and forward, and the passengers get seasick,” he said. “That’s the situation we’re in.” In a recent report, the I.R.C. noted that many of the world’s worst humanitarian crises, including the tragedy in Sudan, “have only intensified” since the Iran war began, “while the systems meant to contain them are breaking down.” As Miliband put it, “The Iran war couldn’t have happened at a worse time, and it set off a chain of events that’s very damaging.”

That turmoil did not seem to be weighing on the man most responsible for unleashing it. On Wednesday, at the G-7 summit, Trump entered a meeting room late and, while taking a seat alongside other world leaders, announced, to their laughter, “I’m the boss.” ♦