President Donald Trump signed an interim deal with Iran, which is now in effect, aimed at ending the war and reopening the Strait of Hormuz. This agreement, also known as a memorandum of understanding (MOU), was signed digitally on June 14 by Vice-President J.D. Vance and Iranian Parliament Speaker Mohammad Bagher Ghalibaf, with Trump as a witness. On June 17, Trump and Iranian President Masoud Pezeshkian also signed the agreement. The deal anticipates the rapid reopening of the Strait of Hormuz, which had been closed for months, causing global energy prices to soar. Immediate sanctions waivers for Iranian oil are also part of the agreement, with further talks on nuclear issues and potential financial gains for Iran to follow. The formal signing by Vance and Ghalibaf is scheduled for the Swiss town of Bürgenstock, a mountain resort overlooking Lake Lucerne.
The interim deal centers on exchanging the reopening of the Strait of Hormuz for economic relief for Iran. Bloomberg Economics analysts, including Dina Esfandiary and Ziad Daoud, noted that this exchange is uneven, suggesting Tehran's gains will be substantial and new, while Washington will largely regain benefits that existed prior to the war in February. The closure of the Strait of Hormuz, caused by blockades from both the U.S. and Iran and threats of drones and missiles from Tehran, had significantly driven up energy prices globally, impacting Trump's standing ahead of the November midterm elections. The deal's implementation shifts focus to shipping companies, many of which had ceased using the strait.
According to a draft seen by Bloomberg and described by a senior U.S. official on June 17, the deal expects the Strait of Hormuz to be rapidly reopened. Trump had previously indicated that the deal would be signed on June 19 to allow for de-mining operations in the strait. The text also includes immediate sanctions waivers for Iranian oil. The agreement comes after the Strait of Hormuz's closure, which had sent global energy prices soaring for several months, and a slight decline in prices was observed on Wednesday.
