The US-Iran peace deal officially came into effect on Thursday, June 18, 2026, leading to the immediate reopening of the Strait of Hormuz. Ships crossing the strait will benefit from a 60-day fee-free period, after which Iran intends to levy charges. The agreement, electronically signed by Presidents Trump and Iran's President, is a 14-point Memorandum of Understanding (MOU) aimed at ending the conflict between the two nations.
Details of the MOU, outlined as the "Islamabad Memorandum of Understanding," include significant economic incentives for Iran, such as the ability to sell oil immediately, access a $300 billion development fund, and eventually unlock frozen assets. This has, however, strained Trump's relationship with Benjamin Netanyahu, given strong opposition from Israeli officials regarding the agreement with Iran. The G7 leaders have welcomed the deal, a contrast to earlier skepticism from European allies about the reopening of the Strait of Hormuz.
Amidst these developments, the Bank of Japan raised its benchmark interest rate to a 31-year high, signaling further policy normalization. Oil prices fell by 2% following the ceasefire agreement, with Brent crude dropping to $79 per barrel, a level last seen before the war began. President Trump, at a G7 summit press conference, downplayed previous US red lines, suggesting Iran has the right to enrich uranium, develop ballistic missiles (stating "missiles aren't the problem"), and should regain access to its frozen funds, which he noted were "not our money."
Two German ships are reportedly en route for a possible military mission in Hormuz. Separately, Sudan has disavowed Iranian weapons in an effort to garner US support for ending its own conflict, and the US is exploring deeper energy collaborations with Namibia. Concurrently, G7 leaders have agreed to reinforce sanctions on Russian oil and gas. The peace deal allowed roughly 500 ships and thousands of sailors, previously trapped in the Strait of Hormuz, to begin exiting, although the process is expected to be slow due to potential repairs and clearing mine dangers.
