US and Iran Reach Preliminary Deal to Reopen Strait of Hormuz and Extend Ceasefire

ISLAMABAD — The United States and Iran have reached a preliminary agreement aimed at reopening the Strait of Hormuz and extending a fragile ceasefire, raising hopes of easing global energy market disruptions caused by months of conflict across the Middle East.

The memorandum of understanding was announced early Monday following mediation efforts led by Pakistan and Qatar. While details of the agreement have not yet been made public, officials indicated that formal implementation will only begin after a signing ceremony scheduled for Friday in Switzerland. If successfully implemented, the deal could mark a significant step toward ending a conflict that has claimed thousands of lives, destabilised the region, and triggered a major energy crisis by disrupting oil and natural gas shipments through one of the world's most strategically important waterways.

The agreement centres on reopening the Strait of Hormuz, a vital maritime route through which a substantial portion of the world's oil and liquefied natural gas exports pass. US President Donald Trump welcomed the breakthrough in a social media post, saying he had authorised the reopening of the waterway and the removal of the US naval blockade that had been imposed during the conflict.

However, both Washington and Tehran later clarified that implementation would not begin until the agreement is formally signed. Iranian Deputy Foreign Minister Kazem Gharibabadi confirmed the understanding on state television, stating that Iran would honour the arrangement following Friday's signing ceremony.

Pakistan announced the agreement first, with Prime Minister Shehbaz Sharif describing it as a major diplomatic achievement. According to Sharif, both sides agreed to an immediate and permanent cessation of military operations on multiple fronts, including areas affected by broader regional tensions. Qatar also played a significant role in facilitating negotiations, with officials reportedly conducting lengthy discussions in Tehran before departing after a breakthrough was reached. Diplomatic sources indicated that additional preparatory meetings are expected to take place in Doha this week ahead of the formal signing.

Despite the ceasefire agreement, significant hurdles remain. The framework reportedly provides just 60 days for negotiators to resolve outstanding disputes surrounding Iran's nuclear programme and stockpile of highly enriched uranium. The issue has long been one of the most contentious aspects of US-Iran relations. The United States has reportedly continued to press for the removal of Iran's highly enriched uranium stockpile. At the same time, Iran has maintained that its nuclear programme is peaceful and insists on retaining control of its nuclear materials. Analysts note that resolving the issue within two months will be difficult given the complexity of previous negotiations, including the 2015 nuclear agreement that took years to conclude.

The deal also faces uncertainty because of ongoing regional conflicts. Israel has continued military operations against Hezbollah in Lebanon, including recent strikes on Beirut's southern suburbs. Observers say the success of the broader ceasefire may depend on whether all regional actors commit to de-escalation. Israeli authorities had not publicly commented on the agreement at the time of reporting.

Global financial markets responded positively to news of the breakthrough. Benchmark Brent crude oil prices reportedly fell by more than US$4 per barrel as traders anticipated a resumption of energy exports through the Strait of Hormuz. Asian stock markets also posted gains amid expectations that reduced geopolitical tensions could stabilise energy supplies and lower transportation costs. However, energy analysts cautioned that it could take months before shipping companies and insurers regain sufficient confidence to fully restore normal operations in the region.

The proposed agreement has already attracted scrutiny in Washington. Some Republican lawmakers expressed concern that Iran's interpretation of the deal may differ from that of the US negotiating team. Democratic lawmakers also signalled that Congress would closely monitor any agreement involving Iran, particularly provisions relating to nuclear activities and sanctions. Meanwhile, Iranian officials urged unity at home, warning that public divisions could weaken the country's negotiating position during the next phase of talks.

The agreement is expected to be formally signed in Switzerland on Friday, after which technical negotiations will continue on unresolved issues, particularly Iran's nuclear programme and long-term security arrangements. While the deal represents a significant diplomatic breakthrough, analysts caution that its success will depend on sustained political commitment from all parties and progress on the difficult issues that remain unresolved. For now, the reopening of the Strait of Hormuz and the continuation of the ceasefire offer a potential pathway toward greater regional stability and relief for global energy markets.

US Iran Strait of Hormuz deal