US oversaw secret oil transfers near Hormuz - Reuters

German Chancellor Friedrich Merz said on Tuesday he was confident the agreement with Iran would work and that Tehran would accept the conditions because it had no choice.

Merz said US military superiority left Iran with no choice.

He added that he had told President Donald Trump that the situation showed military strength could lead to a diplomatic solution and could serve as an example for Ukraine.

The United States will allow Iran to immediately begin selling oil and fuel under the agreement to end the war, offering Tehran an early financial incentive to wind down the conflict, the Wall Street Journal reported, citing people familiar with the agreement.

The sanctions waivers for oil sales will take effect immediately upon signing the agreement this week and will also cover banking, transportation and insurance services needed to facilitate the sales, the report said.

The Wall Street Journal cited a senior US official as saying that while Iran would receive upfront sanctions relief for oil sales, sustained relief would depend on Tehran meeting US demands on issues including opening the Strait of Hormuz and its nuclear program.

Tehran would still not get immediate access to billions of dollars in frozen funds, the official said, according to the report.

US intelligence agencies have recently assessed that Iran can effectively shut down access to the Strait of Hormuz at will, meaning Tehran has acquired a powerful new ability to hurt the global economy as a result of the war, CNN reported on Tuesday, citing three sources familiar with the findings.

“We have now handed Iran de facto control over the strait – a weapon more powerful than any nuke,” one source familiar with the assessments told CNN.

A senior US official told CNN that Iran cannot access any benefits of the framework agreement unless the strait remains open and Tehran abides by the other points it agreed to. The official said the US would wind down its blockade in proportion with Iran restoring traffic in the strait.

Another source familiar with the framework agreement said Iran had upset China and Persian Gulf countries by trying to disrupt the free flow of energy through the strait. “Iran pays a price when they do this,” the source told CNN.

Mediators in US-Iran talks are discussing non-aggression pacts, Tehran's regional allied groups, nuclear issues and the Strait of Hormuz with Iran, Qatari Foreign Ministry spokesperson Majed al-Ansari said on Tuesday.

"We are on the right track now towards regional security," al-Ansari told reporters in Doha. "Obviously, there are a lot of challenges coming ahead, but let's take this as a moment to enjoy some optimism."

"We are talking about various issues: the Strait of Hormuz, regional security and non-aggression, and good neighborly relations between this region and Iran," he said, adding that Iran's nuclear program, regional allied groups and missiles were also being discussed.

"These will not be resolved in mere days," he added.

US Senator Lindsey Graham said President Donald Trump's actions had weakened Iran and its proxies, creating a chance for negotiations to end Tehran's nuclear ambitions and for the Abraham Accords to expand.

"I sincerely hope the upcoming negotiations to forever foreclose Iran's nuclear ambitions are a success," Graham said.

He said Iran and its regional allied groups were "incredibly weakened" and that their ability to generate "another October 7 doesn't exist," adding that Iran's nuclear capability had suffered "a major setback."

Graham said the "ultimate win" would be opening a path to peace through the expansion of the Abraham Accords and regional integration.

"If the conflict with Iran yields this outcome, it will be one of the most successful military operations in American history," he said.