SynopsisGlobal markets are optimistic about a new peace framework involving Iran, easing energy supply and geopolitical concerns. Investors welcome reduced Middle East risk, though Iran's nuclear program and the agreement's long-term durability remain key questions. Economic incentives and Israel's stance are critical factors influencing the outcome.AgenciesAccording to Lee, negotiations could become more complex as different parties seek leverage ahead of any final settlement.The emerging peace framework involving Iran has sparked optimism across global markets, easing concerns over energy supplies and geopolitical tensions. Investors have welcomed the reduced risk of disruption in the Middle East, though major questions remain around Iran's nuclear programme and the long-term durability of the agreement.Speaking to ET Now, William Lee from Global Economic Advisors said the biggest challenge is securing a credible commitment from Iran on nuclear weapons."That really is the crux of the matter. Right now, we do not have an agreement from Iran saying they will not have nuclear weapons, and now we are hoping to negotiate with them to get that agreement."Lee said his optimism stems from the possibility that economic incentives could encourage Iran to embrace reforms and deeper engagement with the global economy."The West will be more than willing to help redevelop their country, bring them into the 21st century and allow the people to have the kind of economic freedoms and benefits that the world now enjoys."However, he cautioned that Iran's internal political structure remains a major uncertainty."The uncertainty about Iran's government is the big obstacle. Who is in charge? Is it the Revolutionary Guard or a more progressive element?"Relief Rally Hinges on Strait of HormuzMarkets have reacted positively to the prospect of reduced tensions, particularly in countries dependent on energy supplies passing through the Strait of Hormuz."The countries that have most depended upon energy from the Strait of Hormuz, that is where the relief is going to be."Lee said keeping the vital shipping route open would be crucial for sustaining the current rally."If the Strait of Hormuz comes under fire again, you will see that kind of optimism disappear."AI Continues to Drive Investor InterestBeyond geopolitics, Lee noted that artificial intelligence remains a powerful investment theme, especially across parts of Asia."The AI trade really is beginning to mature to the point where specific companies that directly improve productivity are the ones shooting up like crazy."He said investors are increasingly rewarding firms with practical AI applications while becoming more selective about those struggling to demonstrate commercial value."Those extremes show you how the AI trade is factoring into investors looking for companies that will lead to higher productivity now or in the very near future."Israel's Position Will Be CriticalWhile Iran has dominated discussions around the peace framework, Lee believes Israel's role will be equally important in shaping the final outcome."Netanyahu has already said that the strategic goals are in sync. The tactics are the ones that are in question right now."According to Lee, negotiations could become more complex as different parties seek leverage ahead of any final settlement."We are seeing the manoeuvring of tactics along the edges of what will be the new boundaries."India Could Benefit From Energy DiversificationLee also highlighted the lessons India can draw from recent disruptions in global energy markets."India found that it is very vulnerable to supply cutoffs."He pointed to small nuclear reactor projects as one potential solution for strengthening the country's energy security."There is hope that India will actually begin to benefit by learning the lesson from this experience: diversify your energy grid."Hope Tempered by UncertaintyThe prospect of peace has improved market sentiment and reduced immediate concerns over energy supply disruptions. Yet the agreement's success will depend on difficult negotiations involving Iran, Israel and other regional stakeholders. For investors, the current optimism reflects hopes of greater stability, but the durability of that optimism will ultimately be determined by developments at the negotiating table.Read More News on(What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price...moreless(You can now subscribe to our ETMarkets WhatsApp channel)Read More News on(What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price...moreless