US and Iran sign preliminary deal to end four-month Middle East war and reopen Strait of Hormuz

What the agreement contains

President Donald Trump announced on Monday that the United States and Iran had signed a preliminary memorandum of understanding to halt the nearly four-month war. The deal extends a fragile April ceasefire by 60 days and commits both sides to reopen the Strait of Hormuz, which Iran has effectively closed since the conflict began. A formal signing ceremony is scheduled for Friday at the Bürgenstock resort in Switzerland, with Vice President JD Vance expected to attend in person.

The deal’s all signed.

During the 60-day window negotiators will address the future of Iran’s nuclear programme. Iranian officials said Tehran would freeze enrichment and expansion of its nuclear facilities pending a final agreement. The deal also includes what Vance described as "a very significant sanctions relief package" for Iran. Two stated war aims of Israel and the US, ending Iran’s support for regional proxies and curbing its missile programme, are not on the negotiating agenda.

Doubts over permanence and implementation

Both governments acknowledge that a lasting truce has yet to take shape. Iranian President Masoud Pezeshkian called the memorandum "an important step" but cautioned that a final accord "has yet to take shape." Vance stressed that the signed document was a "very general document" and that full details would be released over the next two days.

An important step toward stopping the fighting, but a final agreement for a lasting truce has yet to take shape.

Shipping experts warned that even if the Strait reopens, normal supply flows are weeks away. Removing mines, restoring marine insurance coverage, and winning the confidence of vessel operators will all take time, said Tony Sycamore of IG. Tim Waterer of KCM Trade added that until the details emerge the market will remain cautious about pricing out risk premium.

Oil market swings

Benchmark Brent crude fell nearly 5% on Monday to a three-month low near $83 a barrel before edging up 0.3% on Tuesday. The earlier war-driven price spike had seen Brent climb from roughly $70 before the conflict to a peak of $118 in late March, as the Strait of Hormuz blockade shut in about 14 million barrels per day of output and choked off one-fifth of global crude and LNG supply.

In the United States the national average retail gasoline price dropped below $4 a gallon for the first time since mid-April. Patrick De Haan of GasBuddy noted that the real test is whether oil flows resume through the Strait: "For now, the national average could continue falling, provided there isn’t a drastic reversal."

Timeline of the conflict and the deal

Political dividing lines

The interim agreement has inflamed domestic divisions inside both Iran and Israel. Israeli broadcaster Channel 12 reported that the United States rejected Israel’s request to view the memorandum text before Friday’s ceremony.

In Tehran the leadership is selling the deal as a victory. Parliament Speaker Mohammad Bagher Qalibaf said Iran had taken "a long step towards final victory," and his support signals backing from powerful factions within the Islamic Revolutionary Guard Corps. Yet a deputy chair of parliament’s National Security Committee described the draft as a document that would turn Iran into an American colony and accused negotiators of ignoring the supreme leader’s directive not to reopen the Strait.

Broader diplomatic stage

The deal was struck on the sidelines of the G7 summit in Evian, France, where European Commission President Ursula von der Leyen publicly congratulated Trump.

This is how diplomacy bears fruit. We both agree that this must mean the definitive end of the Iranian nuclear programme. The Strait will reopen. Oil prices are falling.

A senior Iranian official said that pending a final accord Iran would freeze its nuclear activity, and diplomats from Pakistan, Qatar and Switzerland helped facilitate the talks leading to the Bürgenstock ceremony.