[US-IRAN ANALYSIS] Conflicting remarks surrounding inspections of Iran's nuclear facilities; all eyes on Lebanon-Israel talks in the US

TLDR:

• The US and Iran are continuing to finalise an agreement within the 60-day negotiation period. Amidst the talks, US President Trump reiterated that they are making a deal with Iran and will see how it goes.
• Currently there are conflicting remarks made by US and Iranian officials. There appears to be some disagreements surrounding the inspection of Iranian nuclear sites, and on potential tolling of the Strait of Hormuz.

Nuclear inspections and Hormuz:

• On the nuclear side of things, President Trump has continued to push back on Iranian claims that there will be no IAEA inspectors at their nuclear facilities. He added that the inspectors will be on the ground at an appropriate time, but without rush. On this matter, IAEA SecGen Grossi stated that Iran’s nuclear facilities will remain under monitoring. One nuance the market may look to pick up on is that Iran directly said that it has “no plan” to allow inspections at nuclear facilities hit by the US (e.g. Fordow, Natanz, and Isfahan). It may be the case that this detail is still yet to be ironed out.
• Another key sticking point is the Strait of Hormuz. Iran’s position is that the Strait will be toll-free throughout the 60-day negotiation period, before then implementing some services/management fee thereafter. On Tuesday, US Secretary of State Rubio stated that Iran (or any other country) will not be allowed to collect tolls.

Lebanon/Israel:

• One of the key risks to the current US-Iran MoU is the situation in Lebanon. With Iran continuing to keep Lebanon as a red-line, and with Israel continuing its operations within the region, the risk of another round of fighting cannot be discounted.
• On the ground, the ceasefire appears to be somewhat holding. Israel fired and killed two individuals in southern Lebanon on Tuesday, which Hezbollah claims was a ceasefire violation. But there does not appear to be any large-scale attacks so far.
• From a negotiation standpoint, Lebanon and Israel entered US-mediated negotiations on Tuesday. There was no breakthrough, with attention on “pilot zones”, whereby the two countries were looking to agree on areas that the Lebanese army can replace withdrawing Israeli forces.
• The mood music from the initial talks does not appear to be one of positivity, with an Israeli ambassador suggesting it was a “train wreck” to allow the Lebanon ceasefire to be linked with the US-Iran MoU. Nonetheless, the final day of talks are expected restart today.