Trump clinches Iran peace framework, reopening Hormuz but nuclear deal elusive ahead of midterms
A Pakistani-mediated memorandum of understanding halts three months of hostilities and lifts the Strait of Hormuz blockade, yet the fate of Tehran’s atomic programme remains unresolved.
The breakthrough deal
After more than three months of war, the United States and Iran agreed on Sunday to a framework peace deal that extends the current ceasefire by 60 days, ends the U.S. naval blockade of Iranian ports and reopens the Strait of Hormuz. Pakistani Prime Minister Shehbaz Sharif, who mediated the talks, announced the accord on social media early Monday. President Donald Trump confirmed it on his Truth Social platform, calling the agreement complete. A formal signing is scheduled for Friday in Switzerland.
Ships of the World, start your engines. Let the oil flow!
The deal does not dismantle Iran's nuclear programme, Trump's stated main war objective. Instead, that issue is deferred to the upcoming 60-day talks. The terms also reportedly include the release of $25 billion in frozen Iranian assets. Both sides have given sometimes conflicting interpretations of the framework.
- U.S. and Israeli forces launch military operations against Iran
- Trump and Iran agree to peace framework, ceasefire extended 60 days
- Formal signing ceremony in Switzerland
Market euphoria
Asian equity benchmarks surged, with Tokyo and Seoul gaining more than 5% early Monday. S&P 500 futures climbed 0.8% and Nasdaq futures jumped 1.4%. Oil prices plunged: Brent crude fell $3.51, or 4%, to $83.82 a barrel, while U.S. West Texas Intermediate slid $3.93 to $80.95. The dollar index slipped 0.31% to a 10-day low of 99.492, as investors rotated into riskier assets.
The prospect of a sustained fall in energy prices changes the conversation for central banks just ahead of a flurry of policy decisions.
The relief rally cooled inflation fears ahead of a heavy central-bank week, with the Fed, Bank of Japan, ECB and others meeting. Markets trimmed rate-hike bets, pricing only a 40% chance of a Fed move as early as October.
- Nikkei futures
- 2 %
- S&P 500 futures
- 0.8 %
- Nasdaq futures
- 1.4 %
- Dollar index
- -0.31 %
Lingering doubts and Hormuz risks
Iran linked any deal to Israel's campaign against Hezbollah in Lebanon, where violence flared again over the weekend. An Israeli strike on Beirut on Sunday drew sharp criticism from both Trump and Tehran. Iran's top joint military command said its finger is on the trigger, and its foreign ministry held Washington responsible.
Israel was not party to the planned U.S.-Iran deal.
Even the status of the Strait is ambiguous. Iran said traffic would be regulated jointly with Oman, raising the prospect of a toll on shipping. Analysts warned that Iran's willingness to choke off the waterway for months has broken a decades-old taboo, giving Tehran a permanent lever over its neighbours. Saudi Arabia and the UAE have already shifted exports to Red Sea and Fujairah ports, a logistical change unlikely to be fully reversed.
International reaction
U.N. Secretary-General Antonio Guterres welcomed the deal as a critical step towards peace. European leaders from Britain, France, Germany and Italy pledged to work with all sides to ensure Iran never gets a nuclear weapon. Japanese Prime Minister Sanae Takaichi said she strongly hopes free navigation through Hormuz will be ensured in practice.
Iran must never have a nuclear weapon.
What remains unresolved
Beyond the nuclear file, the accord leaves open the question of how quickly oil flows can return to pre-war levels. Shippers and insurers are expected to remain cautious, and even after Hormuz reopens, high insurance costs and a preference for alternative export routes could persist. The 60-day negotiating window begins on Friday, but with hawks in Washington pushing back against concessions and Tehran keeping its military options open, the ceasefire remains fragile.
