A Grand Bargain To End The Israel-Iran War
A Grand Bargain to End the Israel–Iran Conflict
After more than a week of missile barrages, drone swarms, and headline‑grabbing air‑strikes, the Israel–Iran confrontation is still escalating toward a point where a single miscalculation could shut the Strait of Hormuz or put the region on a nuclear timer. Below is a phased grand‑bargain that trades verifiable limits on Iran’s nuclear and proxy activities for the end of Israeli offensive operations and full U.S. sanctions relief—all under a tough, automatic snap‑back mechanism.
The goal here is to end the conflict permanently, in part by offering Iran genuine carrots instead of just sticks. This plan also relies on bringing in two key third countries that each have cordial relations with both Iran and Israel: Russia and India, and offers them an incentive as well. Before we get to it, a brief note addressing investor concerns related to the conflict.
Addressing Investor Concerns Related To The Conflict
If you're simply looking to limit your downside risk in case the conflict escalates, you can use the Portfolio Armor iPhone app (or website, if you don't have an iPhone) to find the optimal hedge based on your positions and risk tolerance.
If you're looking for an enterprising investor's approach to the conflict, this post offers a roadmap for that.
⚡️If (When?) The U.S. Bombs Iran⚡️
— Portfolio Armor (@PortfolioArmor) June 18, 2025
Trading the next phase of the Israel 🇮🇱-Iran 🇮🇷 War. $QQQhttps://t.co/2YDV5eoWnr
Finally, if you just want to tail our next trade, you can subscribe to the Portfolio Armor Substack below.
Now let's look at a way we can end the war and increase prosperity in the region.
A Phase‑by‑Phase Roadmap
| Phase | Timing | Actions by Iran | Actions by Israel | Actions by U.S./Others | Verification & Penalties |
|---|---|---|---|---|---|
| 0 · Cooling‑Off | 48 hours after U.N. vote | • Halt launches of missiles and drones against Israel. • Public expression of regret for the 1979 embassy takeover and 1983 Beirut bombing; $ compensation placed in a Swiss‑escrow fund. | • Halt air/cyber/covert strikes inside Iran & Lebanon. | • General licenses for humanitarian goods; EU eases medical‑device bans. | U.N. monitors cease‑fire; any breach triggers maritime & air interdictions under Chapter VII. |
| 1 · Confidence Building | Days 3‑90 | • Stop enrichment above 3.67 % U‑235; cap stockpile at 300 kg.• Invite IAEA + Indian/Russian inspectors to Natanz, Fordow, Isfahan.• Start drawing down IRGC advisers in Lebanon, Syria, Iraq, Yemen. | • Pull IDF armor back to pre‑June‑2025 lines; no over‑flights beyond Golan buffer. | • 90‑day waivers on oil shipping and banking sanctions. | IAEA seals + 24/7 cameras streaming to Vienna–Delhi–Moscow hub. Breach → full sanctions snap‑back in 15 days. |
| 2 · Formal Accords | Month 4 | • Sign Additional Protocol; lock enrichment ceiling at 3.67 % with ≤ 5,000 centrifuges.• Terminate lethal aid to Hezbollah, Houthis, Hamas, Iraqi militias. | • Join a Moscow‑run de‑confliction cell to resolve future incidents. | • U.S. issues a no‑regime‑change pledge; Russia, China, and EU codify sanctions relief in a new U.N. Security Council resolution. | Oversight Panel (IAEA + P5 + India + Saudi Arabia) must unanimously certify compliance each year or sanctions snap back. |
| 3 · Economic & Security Dividends | Years 1‑5 | • Access $40B in frozen assets;• | • Sign Freedom‑of‑Navigation Compact covering the Persian Gulf, Bab al‑Mandab, and Suez. | • Restore full petro‑chem, shipping, and dollar clearing; launch multilateral anti‑piracy task‑force with Russian observer status. | Snap‑back stays armed for any “material breach.” FON Compact policed by a U.S.–India–EU naval mission. |
Why Each Capital Might Sign On
| Stakeholder | Wins | Domestic Hurdles | Possible Sweeteners |
|---|---|---|---|
| Iran | • Immediate sanctions relief and cash windfall.• International legitimation of a civilian nuclear program.• Breathing space for an economy battered by inflation and currency collapse. | Hard‑liners reject any apology or proxy draw‑down. | Phrase apology as “regret,” not “mea culpa.” Payouts come from escrow, not government coffers. |
| Israel | • Verified < 3.67 % enrichment & missile‑range cap.• Disarmament of Hezbollah and other proxies removes the multi‑front threat. | Skeptical coalition partners see any deal as “Munich 2.0.” | Automatic snap‑back + explicit right to re‑strike if IAEA access is blocked for > 48 hrs. |
| United States | • Defuses Gulf risk; lowers oil and shipping premiums.• Frees military bandwidth for China focus. | Statutory sanctions need congressional repeal. | Use executive waivers for Phase 1; permanent repeal only after Year‑1 certification. |
| Russia & India | • Diplomatic prestige as neutral guarantors.• Nuclear‑reactor and port contracts. U.S. blessing for International North-South Corridor. | Risk of blow‑back if a side cheats. | Guaranteed seats on Oversight Panel + observer role in the Gulf naval mission. |
Key Design Features
Escrow‑Based Compensation — Victims’ heirs paid from a World Bank trust, sidestepping Iranian domestic backlash over “blood money.”
Tri‑Party Inspection Team — IAEA plus India and Russia give Iran face‑saving “great‑power” cover and give Israel added confidence in on‑site monitoring.
Automatic Snap‑Back — A simple IAEA breach notice starts a 15‑day clock; all suspended sanctions revive unless the Oversight Panel unanimously votes not to snap back.
Proxy Draw‑Down Benchmarks — For every 1,000 rockets surrendered by Hezbollah, $500 m in frozen funds unlocks — creating a cost‑of‑cheating Iran’s partners will feel.
Spoilers to Watch
| Potential Spoiler | Risk | Mitigation |
|---|---|---|
| IRGC‑Quds Force or Hezbollah hard‑liners stage a provocation. | Could collapse Phase 0 cease‑fire. | Benchmark‑linked aid release makes sabotage economically painful; Oversight Panel can mandate immediate sanctions snap‑back. |
| U.S. Congress re‑imposes sanctions. | Breaks economic payoff Iran needs to sell deal at home. | Quarterly compliance reports create leverage; sunset clauses require a new vote to extend sanctions. |
| Israeli domestic backlash. | Coalition might bolt if Russian mediation viewed as biased. | Add a side‑letter for U.S.–Israel Arrow‑4/6 missile‑defense funding. |
| Oversight Panel gridlock. | Great‑power rift could paralyze enforcement. | Snap‑back only needs one veto‑less IAEA notification; blocking requires unanimity, not triggering. |
Bottom Line
A cease‑fire and sanctions trade‑off of this scale won’t fly while rockets are still in the air. But once the parties calculate that the costs of escalation outweigh the leverage they gain from it, this roadmap offers an off‑ramp both can spin as a win:
Tehran gets cash, legitimacy, and a nuclear ice‑box it can live with.
Jerusalem gets a verifiable end to the bomb path and proxy rocket fire.
Washington gets cheaper oil, safer shipping lanes, and fewer troops tied down in yet another Middle‑East fight.
Whether the politicians in Tehran, Jerusalem, and Washington can sell it is another question — but at least the math is now on the table.