Iran and US Agree to End War, Reopen Hormuz, Causing Oil Prices to Plunge
Breakthrough Agreement and Its Global Impact
By Parisa Hafezi, Yomna Ehab and Humeyra Pamuk
DUBAI/WASHINGTON, June 15 (Reuters) - U.S. and Iranian officials said they had reached an agreement to end their war and reopen the Strait of Hormuz, a preliminary pact that sent oil prices falling but leaves the fate of Tehran's nuclear program to further negotiations.
While still a framework, the deal marked the biggest breakthrough towards resolving the conflict that has killed thousands and upended energy markets since it began with joint U.S.-Israeli strikes on Iran in February.
Announcement of the Deal
"The Deal with the Islamic Republic of Iran is now complete," U.S. President Donald Trump wrote on his Truth Social platform at around 5:30 p.m. in Washington (2130 GMT) on Sunday. His post came shortly after Pakistani Prime Minister Shehbaz Sharif, whose country has served as a mediator, announced a deal had been struck early on Monday local time.
The memorandum of understanding is scheduled to be officially signed on Friday in Switzerland.
Terms and Immediate Reactions
The precise terms were not immediately known. Sharif said in a post on X that the pact called for "the immediate and permanent termination of military operations on all fronts, including in Lebanon."
Lebanon has been a sticking point in negotiations, with Israel and Hezbollah ignoring calls from Trump and others to stop their attacks on each other in recent weeks.
In a statement, the secretariat of Iran's Supreme National Security Council said war and military operations on all fronts, including Lebanon, would end permanently starting on Monday night.
Iran's deputy foreign minister, Kazem Gharibabadi, said a more expansive agreement would be negotiated during a 60-day ceasefire period, including sanctions relief for Iran.
The fate of Iran's nuclear program, another thorny issue, will also be addressed in those later talks, sources previously told Reuters.
There was no immediate reaction to the announcement from Israel, which has said it was not party to the U.S.-Iran talks.
Strait of Hormuz to Reopen
Trump said the Strait of Hormuz, a major shipping route for global oil and gas supplies that Iran has effectively shut down for months, would open on Friday, and that he had ordered the end of the U.S. blockade of Iranian ports.
"Ships of the World, start your engines. Let the oil flow!" Trump wrote.
Market Response
Oil prices fell on the news. Brent crude futures fell 4% in early trading on Monday while stock markets in Asia jumped.
"The lack of details especially on freedom of shipping is a concern but not one that should constrain markets today as the surge in risk appetite plays out," said Sean Callow, a senior FX analyst at ITC Markets.
Political and Economic Implications
Former Biden administration State Department spokesperson Matthew Miller said Trump had made important concessions to Iran to achieve the status quo that existed before he launched the war.
"We have no assurances the nuclear program will ever be addressed, but Iran has shown the world it can take the global economy hostage and get something from the U.S. in return," said Miller.
Thousands of people have been killed, mostly in Iran and Lebanon, since U.S. and Israeli forces first attacked Iran on February 28. Iran has struck Israel and Gulf states hosting U.S. bases and has effectively blockaded the Strait of Hormuz, pushing up global energy prices. U.S. forces have blocked Iranian ports in response.
Domestic Political Pressure
The war has become a political liability at home for Trump and his fellow Republicans in Congress, with public opinion polls showing Americans deeply frustrated by rising gas prices ahead of November's midterm elections. But Trump has also faced pressure from members of his own party who insist that Iran's nuclear program must be completely shut down.
Republican Senator Lindsey Graham, a leading Iran hawk, praised the deal but said he would be "watching closely" the coming negotiations on Iran's nuclear program.
"Under our law, any nuclear deal with Iran will be sent to Congress for review and a vote," he said. "Congratulations to all in getting us to this point."
Historical Context
During his first term, Trump withdrew the U.S. from a 2015 multilateral Iran deal, negotiated by Democratic President Barack Obama, that lifted sanctions on Tehran in exchange for limits on its nuclear program, including international inspections.
Iran responded by ramping up its enrichment of uranium, producing more than 400 kg (around 900 pounds) of material at close to bomb-grade purity. The eventual fate of that uranium is likely to be a key negotiating point during the upcoming talks.
'A Very Difficult Guy': Israel's Position
The agreement was sealed despite an Israeli strike on Lebanon on Sunday that drew criticism from both Iran and Trump.
Prime Minister Benjamin Netanyahu has differed with Trump over American demands that Israel curb its military action in Lebanon to allow the United States to reach a deal with Iran.
Israel has said it will retain freedom of operations in Lebanon, while Iran has made a full ceasefire there an important component of its demands.
Trump updated Netanyahu on the progress toward a peace deal during a phone call on Sunday, Israel's N12 reported, citing a senior official.
In an interview with the New York Times, Trump called Netanyahu "a very difficult guy" and argued the Israeli leader should thank him for saving Israel from a nuclear-armed Iran.
International Reactions
Leaders outside the Middle East, who have kept a wary eye on the conflict, welcomed the announcement.
In a joint statement, Britain, Germany, France and Italy said they were prepared to lift sanctions on Iran in response to "clear, verifiable steps" to limit its nuclear program.
"We are clear that toll-free freedom of navigation must now be restored in the Strait of Hormuz," British Prime Minister Keir Starmer said. "Iran must never have
