Temporary Halt of the US-Iran War and Resumption of Diplomatic Negotiations: South Korea's Response Strategy Amidst Structural Uncertainty

Executive Summary

As of July 2025, the US-Iran conflict has entered a lull with a three-day cessation of hostilities following President Trump's order to halt attacks. However, the possibility of transitioning to sustainable peace remains limited due to the unverified negotiation authority of Iran's interim leadership and Israel's hardline stance. The most likely scenario (50-55% probability) is a prolonged stalemate, with intermittent hostilities likely to recur as core issues—the nuclear program, ballistic missiles, and support for regional proxies—remain unresolved. Although the Strait of Hormuz has been temporarily reopened, full stabilization is expected to take 6 to 18 months. South Korea, which relies on the Middle East for over 70% of its oil imports, will inevitably remain exposed to energy supply risks and oil price volatility. The South Korean government and businesses should adopt a flexible dual-track strategy as their core response framework, simultaneously pursuing risk mitigation through immediate diversification of non-Middle Eastern supply sources and the establishment of financial hedging positions, and opportunity capture by conditionally preparing for entry into the Iranian reconstruction market while complying with sanctions.

I. Issue Situation Analysis

Temporary Halt of the US-Iran War and Resumption of Diplomatic Negotiations: Issue Situation Analysis

1. Background and Progression of the Issue

The US-Iran military conflict, which began on February 28, 2025, with joint airstrikes by the United States and Israel, is recorded as an event that fundamentally shook the security order in the Middle East. The death of Iran's Supreme Leader Ayatollah Ali Khamenei (86) during airstrikes on central Tehran on the day of the outbreak immediately brought Iran's internal political vacuum and power realignment issues to the forefront as structural obstacles to conflict resolution [2]. President Trump publicly declared on March 1, immediately after the outbreak of war, that it would end "within 4 to 5 weeks," but the actual conflict lasted nearly five months, significantly deviating from his prediction [3].

In the early stages of the war, Iran responded by blockading the Strait of Hormuz, which immediately disrupted global oil transport and dealt a severe blow to the international energy market [2]. Subsequently, diplomatic progress was made, including the signing of the Islamabad Memorandum of Understanding (MoU) through Pakistan's mediation and high-level negotiations held in Switzerland in June 2025. President Trump officially announced the end of the war with Iran and the reopening of the Strait of Hormuz on June 14 [5]. However, this agreement was a superficial resolution that did not fundamentally address the three core issues: Iran's nuclear program, its ballistic missile capabilities, and its support for regional proxies. Indeed, the situation remained in a fragile balance, with the recurrence of attacks on civilian oil tankers in the Strait of Hormuz just nine days after the MoU signing [5].

Since then, the conflict has seen repeated flare-ups and lulls. Recently, the war intensified to its highest level since the April ceasefire, with the US conducting nighttime airstrikes on Iran for 13 consecutive days [15]. However, on July 25 (local time), President Trump ordered his military to cease further attacks, leading to another lull [12].

2. Current Situation

Currently, the United States and Iran are maintaining a temporary cessation of hostilities, with attacks halted for three consecutive days. A complex set of factors influenced President Trump's decision to order a temporary halt to recent bombing operations. Military leaders expressed concerns that continued escalation could deplete the inventory of air defense assets, such as Patriot interceptor missiles deployed in the Middle East, to dangerous levels. Progress in negotiations between Oman and Iran regarding the resumption of vessel traffic through the Strait of Hormuz also influenced the decision to halt attacks [12].

Through diplomatic channels, Pakistan and Qatar are intensifying their mediation efforts by exchanging responses to a joint proposal for ending the war submitted by both the US and Iran [4]. US Ambassador to the UN, Mike Waltz, stated that while US forces remain "locked and loaded" and ready to respond immediately, President Trump is allowing "some breathing room" for negotiations [15]. Meanwhile, in Asian markets, oil prices showed a downward trend following the news of the cessation of hostilities, with investors expressing cautious relief [15].

However, skepticism prevails regarding whether this lull will lead to sustainable peace. According to an analysis by the East Asia Institute (EAI), the most probable scenario (50% probability) is a continuation of "managed uncertainty" rather than a complete resolution or breakdown. The prevailing view is that structural breakthroughs in negotiations will be difficult until a new Supreme Leader is elected in Iran [5]. Middle East experts characterize this conflict as a "costly game of chicken for both sides," analyzing that the key variable will be who chooses to make concessions at the negotiating table first [9].

3. Key Actors and Their Positions/Interests

United States (Trump Administration)is navigating a narrowing space between the options of military pressure and diplomatic negotiation. President Trump warns of resuming strong military action if diplomatic efforts fail, while simultaneously expressing a willingness to continue negotiations. The Trump administration's transactional diplomacy is converging towards maintaining negotiation momentum through economic incentives, such as the 60-day waiver for Iranian oil sales, while securing leverage to immediately reimpose sanctions if an agreement is not met [5]. Domestically, concerns that prolonged war and rising oil prices could negatively impact the Republican Party in the November midterm elections are serving as an incentive for resuming negotiations [8].

Iranis being led in negotiations by an interim leadership following Khamenei's death, but its authority and legitimacy are not fully verified. The unverified negotiation authority of Iran's interim leadership and the incomplete internal power realignment structurally limit its capacity to reach a substantive agreement [2]. Iran has warned of escalating the Middle East conflict if the US resumes attacks, while also stating that it is strengthening its military readiness [6]. Economically, the depletion of military resources and economic deterioration due to the war are acting as major pressures pushing Iran toward the negotiating table [9].

Israel (Prime Minister Netanyahu)is the actor voicing the strongest opposition to diplomatic negotiations between the US and Iran. Prime Minister Netanyahu insists that Iran's nuclear program must be ended regardless of any diplomatic agreement, stating that the conflict can only conclude when "this regime is overthrown or weakened enough to know that it must end its nuclear program and change its course" [6]. Prime Minister Netanyahu's visit to Washington is emerging as a key variable influencing the US negotiation stance, and he is pressuring the US to continue airstrikes against Iran [10][14].

Pakistan and Qatarare playing crucial mediation roles in this conflict. Pakistan provided the basis for the Islamabad MoU and is hosting subsequent negotiations, while Qatar is facilitating the exchange of indirect messages between the US and Iran [4]. Both mediating countries are currently focused on exchanging responses to the joint proposal submitted by both sides to maintain negotiation momentum [4][16].

Gulf Arab Statesperceive a direct security threat from the potential for Iran to attack civilian infrastructure [9] and prioritize the stable reopening of the Strait of Hormuz as their primary interest.

4. Summary of Key Issues

The key issues that will determine the future direction of the current US-Iran negotiations can be summarized into four main points.

First, the issue of addressing Iran's nuclear programis the most fundamental issue. The US and Israel demand the complete cessation of Iran's nuclear program, but Iran considers it a sovereign right, creating a stark divergence in their positions [6]. The verification mechanism for nuclear inspections also remains unresolved [2].

Second, the issue of electing a new Supreme Leader in Iranis acting as a structural variable in the negotiations. It is unclear whether the interim leadership in Iran has the authority to reach a substantive agreement following Khamenei's death, and the direction of the new leadership's composition—hardliners versus pragmatists—will be a key variable determining the possibility of a negotiated settlement [2]. EAI analyzes that "structural breakthroughs in negotiations are difficult until a new Supreme Leader is elected in Iran" [2].

Third, the issue of the complete stabilization of the Strait of Hormuzis critical. Although the strait has been temporarily reopened, full stabilization is expected to take 6 to 18 months [2], and the risk premium in the energy, shipping, and logistics sectors will not be resolved in the short term. Iran's ballistic missile capabilities and its support for regional proxies also remain unresolved issues directly linked to the security of the strait [5].

Fourth, Netanyahu's visit to Washington and US domestic political dynamicsare emerging as short-term variables that will influence the direction of negotiations. The tension between Israel's persistent demand for military pressure and the Trump administration's transactional diplomatic approach is weakening the consistency of US policy toward Iran [14]. Domestic political pressures ahead of the midterm elections are also influencing Trump's willingness to negotiate [8].

II. In-depth Issue Analysis

Temporary Halt of the US-Iran War and Resumption of Diplomatic Negotiations: In-depth Issue Analysis

1. Analysis of the Fundamental Causes of the Issue

The fundamental cause of the US-Iran military conflict extends beyond the simple issue of nuclear non-proliferation, stemming from structural conflicts over the hegemonic order in the Middle East. Since the Iranian Islamic Revolution in 1979, the anti-US and anti-Israel stance has been inextricably linked to the very identity of Iran's political system, forming red lines that Iran finds difficult to concede in any negotiation [13]. Iran's pursuit of nuclear capabilities is not merely a military ambition but is deeply rooted in a logic of regime survival, believing that without nuclear deterrence, it will remain vulnerable to US military pressure [11].

The Trump administration's Iran policy also constitutes one aspect of the fundamental causes. Since beginning his second term, President Trump has opted for a strategy of directly transitioning "maximum pressure" into military action, a product of his transactional diplomacy that prioritizes immediate and visible results over diplomatic solutions [5]. However, this approach has encountered the practical limitation that the three core issues—Iran's nuclear program, its ballistic missile capabilities, and its support for regional proxies—cannot be resolved solely through military means [5]. The fact that the conflict lasted nearly five months, despite Trump's initial declaration of a "4 to 5 week" resolution, starkly illustrates this fundamental miscalculation [3].

Israel's role also complicates the fundamental causes of the conflict. Israel views Iran's nuclear program as an existential threat and maintains a strong opposition to the US shifting towards diplomatic negotiations [6][14]. Prime Minister Netanyahu's statement that "this regime must be overthrown, or weakened enough to know that it must end its nuclear program and change its course" suggests that Israel aims for outcomes such as regime change in Iran, not just a nuclear freeze [6]. The divergence of interests among the US, Israel, and Iran thus acts as a fundamental cause that structurally hinders the achievement of a negotiated settlement.

2. Structural Context

Political Structure

At the political level, the most decisive structural variable is the death of Iran's Supreme Leader Khamenei. With Khamenei's death during airstrikes on the day of the outbreak, negotiations are proceeding while Iran's internal power realignment is incomplete, fundamentally constraining its capacity to reach an agreement. The "structural limitations on the capacity to reach a substantive agreement due to the unverified negotiation authority of Iran's interim leadership and incomplete internal power realignment" persist, and "structural breakthroughs in negotiations are difficult until a new Supreme Leader is elected in Iran" [2]. The composition of the next leadership—whether hardliners or pragmatists—has emerged as a key political variable determining the possibility of a negotiated settlement [2].

US domestic politics also form an important structural context. President Trump cannot ignore the negative impact of prolonged war and rising oil prices on Republican approval ratings ahead of the November midterm elections [8]. This serves as the structural background for Trump's repeated oscillation between a hardline military stance and diplomatic resolution, failing to maintain a consistent strategy between the two. The dilemma of being "trapped in war despite possessing the world's strongest hammer" stems precisely from this political structure [1].

Economic and Energy Structure

From an economic structure perspective, the strategic importance of the Strait of Hormuz is the key mechanism that expands the ripple effects of this conflict to a global scale. The blockade of the Strait by Iran in the early stages of the war immediately disrupted global oil transport, and even after its temporary reopening, it is estimated that "full stabilization will take 6 to 18 months," and the situation where "risk premiums in the energy, shipping, and logistics sectors cannot be resolved in the short term" continues[2]. Iran is also not free from economic pressure. The prolonged war has severely depleted Iran's military capabilities, and it faces the substantial risk of greater economic collapse if the United States launches further attacks[9]. Thus, the accumulating economic costs of continuing the war for both sides are acting as a realistic incentive for resuming negotiations.

The Trump administration is converging its diplomatic strategy on maintaining negotiation momentum through economic incentives, such as issuing a 60-day temporary waiver for Iranian oil sales, while simultaneously securing leverage to immediately restore sanctions if the agreement is violated[5]. This is a typical pattern of a transactional approach that utilizes both economic pressure and incentives.

Security Structure

From a security structure perspective, this conflict exhibits the characteristics of a typical "chicken game." Both sides are approaching the negotiation table in a weakened state, and while they seek to completely subjugate each other or reach some form of agreement, the reluctance to concede first is solidifying the stalemate[9]. The fact that even the United States, which possesses military superiority, faces security constraints in a protracted war of attrition, as evidenced by the US military leadership's concerns about depleting stocks of air defense weapons such as Patriot interceptor missiles and their recommendation to halt attacks, demonstrates this[12]. Iran still possesses the capability to attack the civilian infrastructure of Gulf states, and the potential for immense damage to US allies in the Gulf region if the war escalates is also a security structural factor that constrains US military options[9].

3. Comparison with Historical Precedents and Similar Cases

The most relevant historical precedent for understanding the current US-Iran situation is the stalemate following the 2003 Iraq War and the negotiation process for the 2015 Joint Comprehensive Plan of Action (JCPOA). The Iraq War, despite initial military victory, devolved into a protracted war of attrition due to the absence of a political solution, leaving a lesson that military power alone cannot resolve the complex political and religious conflicts in the Middle East. A similar pattern is being repeated in the current US-Iran conflict. The fact that Trump's initial confidence in a short-term resolution has led to an inability to find an exit after five months is structurally similar to the process by which initial optimism in the Iraq War was frustrated[3].

The JCPOA negotiation process provides another important precedent. The 2015 nuclear agreement was achieved through years of multilateral diplomacy and phased confidence-building measures, finding a compromise by limiting and monitoring Iran's nuclear program rather than completely eliminating it. The Trump administration's current approach of phased transactions shows methodological similarities to the JCPOA negotiations[5]. However, the crucial difference is the political vacuum in Iran following the death of Khamenei. During the JCPOA negotiations, Iran could exercise consistent negotiating authority under a division of labor between President Rouhani and Supreme Leader Khamenei, but the current interim Iranian leadership lacks the legitimacy for such negotiating authority[2].

A comparison with the North Korean nuclear issue also offers significant insights. The perception that Iran, not being a nuclear power, is vulnerable to direct US military pressure paradoxically strengthens North Korea's resolve to enhance its nuclear capabilities[11]. This suggests that the outcome of the US-Iran conflict could have ripple effects beyond the Middle East, impacting the entire nuclear non-proliferation order in Northeast Asia. If Iran reaches an agreement to abandon or significantly limit its nuclear program, the argument for pressuring North Korea will be strengthened. Conversely, if Iran succeeds in maintaining its nuclear capabilities despite military pressure, the logic for strengthening North Korea's nuclear deterrence will gain traction[11].

4. Key Variables in Issue Development

The key variables determining the direction of the current situation can be summarized into four main categories.

First, the direction of the formation of Iran's new supreme leadershipis crucial. "The direction of the formation of Iran's new leadership (hardliners vs. pragmatists) is a key variable for the possibility of reaching an agreement,"[2] and if hardliners seize power, negotiations will be structurally more difficult. Conversely, if pragmatists gain the upper hand, the possibility of a phased agreement may open up.

Second, the outcome of Netanyahu's visit to the USis significant. The Israeli Prime Minister strongly opposes US negotiation efforts and demands the complete cessation of Iran's nuclear program[6][14]. If Netanyahu persuades Trump to resume military operations, the current stalemate could immediately collapse. This visit has a high probability of acting as a turning point between negotiation and the resumption of war[1].

Third, the stabilization of the Strait of Hormuzis critical. The full reopening and stable operation of the Strait provide economic incentives for continued negotiations while signifying the release of Iran's most powerful negotiating leverage. With "the Strait of Hormuz expected to take 6 to 18 months for full stabilization despite temporary reopening"[2], the issue of control over the Strait will serve as a practical indicator of the progress or regression of negotiations.

Fourth, the agenda and outcome of the upcoming negotiations hosted by Pakistanare important. "The agenda and outcome of the upcoming negotiations hosted by Pakistan are evaluated as a turning point for the situation in the next 6 to 12 months"[2], and the key question is whether the mediation capacity of Pakistan and Qatar can lead to a substantive agreement. While the fact that these two mediating countries are strengthening their mediation efforts by exchanging responses between the US and Iran is a positive sign[4], core issues such as the nuclear program and inspection verification remain unresolved, indicating a considerable distance to a substantive agreement[2].

In summary, the current situation most closely aligns with the basic scenario of "managed uncertainty" rather than a complete resolution or breakdown (50% probability)[5], with the "most likely scenario being the solidification of a long-term stalemate (50-55% probability)" and a high possibility of "repeated intermittent clashes occurring while core issues such as the nuclear program and inspection verification remain unresolved"[2]. This implies that a structural environment that assigns the management of sustained uncertainty as a core task, rather than short-term resolution, will continue for the time being.