Key facts
- The US and Iran have reached a memorandum of understanding to end a conflict that had closed the Strait of Hormuz.
- The agreement includes an immediate halt to military operations and a 60-day negotiation period for sanctions relief and Iran's nuclear program.
- The Strait of Hormuz will be reopened for commercial shipping, with Iran arranging safe passage at no charge for sixty days.
- The US will remove its naval blockade within thirty days of signing and work towards easing sanctions.
- The deal is expected to lead to the lifting of some sanctions, potentially reconnecting Iran to the global economy.
The United States and Iran have reached a memorandum of understanding (MOU) to end a three-and-a-half month conflict that had closed the Strait of Hormuz and sent shockwaves through global oil markets. The agreement, signed by U.S. President Donald Trump and Iranian President Masoud Pezeshkian, includes an immediate and permanent termination of military operations on all fronts and mutual respect for sovereignty.
The pact sets out a 60-day framework for negotiations over Iran's nuclear program and sanctions relief. Following the signing, Iran will arrange safe passage through the Strait of Hormuz for sixty days, while the U.S. will remove its naval blockade within thirty days. A broader withdrawal of U.S. forces from Iran's proximity would follow within thirty days of a final deal.
Markets reacted positively to the news, with oil prices falling to a three-month low. However, experts caution that significant challenges remain, particularly regarding Iran's nuclear program. The MOU also includes provisions for the U.S. to issue waivers for Iranian oil exports, make frozen assets available, and pursue a reconstruction and economic development plan for Iran worth at least $300 billion.