The United States and Iran have reached an agreement to end their conflict, reopen the critical Strait of Hormuz shipping channel, and initiate a 60-day ceasefire to negotiate a comprehensive peace deal. This preliminary pact, announced by Pakistani Prime Minister Shehbaz Sharif and confirmed by US President Donald Trump, aims to restore stability to global energy markets after the Strait, through which 20% of the world's oil and natural gas transits, had been effectively closed by Iran since February 28, driving up fuel prices worldwide.
The memorandum of understanding (MOU), electronically signed by President Trump and Vice President JD Vance, outlines the immediate opening of the Strait of Hormuz, although de-mining operations will be required before full navigability by Friday. The agreement stipulates that the Strait will be toll-free for the 60-day ceasefire period. Iran’s Foreign Ministry spokesman, Esmaeil Baqaei, stated that Iran, in cooperation with Oman, will be responsible for ensuring the security and safe transit of ships. The deal also includes clauses for the immediate and permanent termination of military operations on all fronts, including in Lebanon, where Israel and Hezbollah have been engaged in conflict.
Key aspects to be negotiated during the 60-day ceasefire include Iran's nuclear enrichment program, with Western nations insisting the country not possess nuclear weapons, and Iran's demand for comprehensive sanctions relief and access to tens of billions of dollars in frozen oil revenues. While a senior Iranian official mentioned a draft allowing for the release of $25 billion in frozen assets, a US official clarified that "zero dollars of unfrozen assets" have been released yet, with relief tied to Iran's verifiable steps to limit its nuclear program and "behaving more appropriately." Oil prices, specifically Brent crude futures, fell 4% on Monday following the news of the deal, and stock markets in Asia saw gains. A formal signing ceremony is planned for Geneva, Switzerland, later this week.
