The United States and Iran have reached a ceasefire deal under which the Strait of Hormuz will reopen toll-free to international shipping. A memorandum of understanding formalising the agreement is scheduled to be signed in Switzerland on Friday. President Donald Trump described the development as bringing the prospect of peace to the region, including Lebanon, where fighting has continued despite earlier truces.
Mediators led by Pakistan played a central role in the final stages of talks that followed a war which began with US and Israeli strikes on Iran at the end of February.
Ceasefire Extension Secures 60-Day Breathing Space
The memorandum extends the existing ceasefire by 60 days and commits both sides to an immediate and permanent end to military operations.
This follows a period of intermittent clashes that had undermined a previous truce reached in mid-April. Key provisions as reported by NBC News include the lifting of the US naval blockade on Iranian ports and Iran's commitment to reopen the Strait of Hormuz without tolls. Pre-war shipping volumes are to be restored within approximately 30 days.
A diplomat with knowledge of the text told reporters that the deal would allow traffic to return to normal conditions swiftly once implemented. Iranian Foreign Minister Abbas Araghchi noted that while no toll would be levied on passage, Iran would continue to manage the waterway and provide services for which fees might apply.
Strait Reopening Promises Relief for Energy Markets
Before the conflict, the narrow waterway carried about 20 per cent of global oil supplies. Iranian restrictions since late February had led to sharp rises in energy costs and supply chain disruptions worldwide.
News of the agreement prompted an immediate market reaction, with Brent crude prices falling more than 4 per cent. They are now trading at around $83 (£60.40) a barrel as per Trading economics. Pakistani Prime Minister Shehbaz Sharif announced that the formal signing ceremony would take place in Switzerland on Friday, following electronic finalisation of the text.
Technical level talks are expected to follow shortly afterwards to address remaining details.The memorandum also sets the stage for subsequent negotiations on Iran's nuclear programme, though details on highly enriched uranium and inspections remain to be worked out.
Broader Diplomatic Support Grows Despite Israel Reservations
Several governments, including those of Qatar, Turkey, Britain, Germany and France, have expressed support for the deal as a means to stabilise the Middle East and ease economic pressures. Israel has not been included in the memorandum and has signalled that it intends to maintain its freedom to act against threats in Lebanon.
Critics in the US have questioned aspects of the agreement, particularly any potential release of frozen Iranian assets, though American officials have stressed that any releases would be performance-based and tied to full compliance with the terms. A recent post on the social media platform X observed that crude oil prices had dropped to their lowest levels since March on the back of the preliminary US-Iran understanding.
Crude prices dropped to their lowest level since March on Monday following news of a preliminary U.S.-Iran agreement.
— Lark Davis (@LarkDavis) June 15, 2026
With a peace deal officially on the table and the Strait of Hormuz set to reopen, let's just pray nobody tosses a wrench into the machiner pic.twitter.com/4faq5kqsra
With the signing now set for Friday, attention will turn to implementation and whether the 60-day period can lead to more lasting arrangements on nuclear matters and regional security.
