U.S. and Iran reach tentative deal to end war and reopen Strait of Hormuz, but Israeli operations in Lebanon cloud the path

The tentative agreement

On Monday, the United States and Iran reached a preliminary deal to expand their fragile ceasefire and reopen the Strait of Hormuz, according to the Associated Press. Pakistan, acting as key mediator, said the agreement would be signed on Friday in Geneva. U.S. President Donald Trump had announced on Saturday that a deal would be signed on Sunday, but final terms were still being negotiated. British Prime Minister Keir Starmer and Trump discussed efforts to end the conflict in a phone call on Saturday, with Starmer welcoming progress and reiterating the UK's readiness to support implementation.

The Strait of Hormuz would be immediately open to all after it was signed.

Israel's war in Lebanon complicates deal

The most immediate obstacle is Israel's military campaign against Hezbollah in Lebanon. Iran has insisted that any peace deal must include an end to the fighting on that front. Israel's defense minister said on Monday that the country would not withdraw from occupied lands in Lebanon. A spokesman for Prime Minister Benjamin Netanyahu stated that Israel will continue to defend itself against any threat to its security. Frustration in Israel is palpable; one senior Israeli official told Reuters anonymously that the preliminary agreement is "terrible for Israel" and that no one in the leadership views it otherwise.

We hope these understandings turn into concrete steps that definitively end the cycle of violence and establish a phase of stability, security, recovery and reconstruction.

Nuclear and sovereignty questions

The deal allows only 60 days to determine the fate of Iran's highly enriched uranium stockpile and its atomic program, which the U.S. and Israel fear could be used for a weapon. This issue took years to resolve in the 2015 nuclear accord that Trump unilaterally abandoned. Separately, Iranian agency Fars cited an informed source saying the memorandum now explicitly recognizes Iranian and Omani sovereignty over the Strait of Hormuz. It also stipulates that toll-free passage lasts only 60 days, after which Iran aims to collect fees for maritime services.

The text of the memorandum was modified to definitively and explicitly underline the exercise of sovereignty by Iran and Oman over the Strait of Hormuz.

Shipping industry awaits clarity

International shipping companies remain cautious. Bloomberg reported that about 300 loaded ships are waiting to transit, with a nearly identical number of empty vessels waiting in the Gulf of Oman. Japanese lines Mitsui O.S.K. Lines and Nippon Yusen are among those holding back. Caravel Group CEO Angad Banga noted that on-the-ground conditions can differ from media reports and that the deal must prove durable over time.

We have seen positive signals in the past, and I believe what truly matters in the end is that the deal holds over time.