On Wednesday, US President Donald Trump and Iranian President Masoud Pezeshkian signed a memorandum of understanding to end the war between the two nations. This agreement, which went into effect two days earlier than expected, initiates a 60-day negotiation period to finalize a peace deal. A core component of the initial agreement is the immediate reopening of the Strait of Hormuz and the lifting of a US naval blockade on Iran's ports.
The immediate impact of the deal was visible on Thursday, as several commercial ships, including three Saudi-flagged supertankers carrying 6 million barrels of crude, began transiting the Strait of Hormuz. These vessels had been stranded for over three months due to the conflict and the closure of the critical chokepoint. Oil prices, which had seen significant increases during the war, eased further, with benchmark Brent crude futures falling by another 2% to below $78 a barrel, their lowest since the conflict began. The deal also waives US sanctions on Iranian oil exports, allowing Iran to re-enter the global market, after exports had nearly halted since April due to the blockade.
While the immediate reopening of the strait and the lifting of the blockade have been welcomed, analysts caution that full normalization will take time. Concerns remain regarding demining efforts and ensuring sustained compliance with the agreement. The deal allows for the Strait of Hormuz to be open without tolls for 60 days, during which Iran will make efforts to provide safe passage for commercial ships. Iran is also expected to hold discussions with Oman and other Gulf littoral states on the future management and maritime services in the Strait of Hormuz in accordance with international law.
