US and Iran announce peace deal to reopen Strait of Hormuz
The US and Iran say they have reached a deal to reopen the Strait of Hormuz, setting the stage for talks on Tehran’s nuclear program
The US and Iran say they have reached a deal to reopen the Strait of Hormuz, setting the stage for talks on Tehran’s nuclear program and halting a war that killed thousands of people and roiled the global economy. “The Deal with the Islamic Republic of Iran is now complete,” US President Donald Trump said on Sunday in a social media post. “I hereby fully authorize the toll free opening of the Strait of Hormuz and, simultaneously herewith, authorize the immediate removal of the United States Naval blockade.” Iran Pushes Differing Deal Versions as US Sticks to Timeline Quick answers to key questions • 5 QUESTIONS 1 What is the US-Iran deal to reopen the Strait of Hormuz? ⌵ The US and Iran reached a deal to reopen the Strait of Hormuz, ending their military blockades and allowing for negotiations on Iran's nuclear program. 2 Why did oil prices drop following the US-Iran peace deal? ⌵ Oil prices dropped over 4% after the announcement of the peace deal as markets reacted to the potential reopening of the Strait of Hormuz, a crucial route for oil transport. 3 How will the US-Iran deal affect global energy markets?
⌵ The deal is expected to ease tensions and restore oil flows through the Strait of Hormuz, significantly impacting global energy prices and availability. 4 What demands did Iran make in the peace deal with the US? ⌵ Iran demanded access to billions of dollars in frozen overseas funds and long-term relief from sanctions as part of the peace deal negotiations. 5 Should we expect oil prices to return to pre-war levels quickly after the deal? ⌵ It is unlikely that oil prices will return to pre-conflict levels quickly, as the recovery of oil traffic and infrastructure in the Strait of Hormuz may take considerable time. The announcement came first from Pakistani Prime Minister Shehbaz Sharif, and was followed by Trump and Iranian state media, which depicted the deal as a capitulation by the US. Oil Drops Oil dropped after the news. Brent fell more than 4% toward $84 a barrel, after closing last week at the lowest in more than three months, while West Texas Intermediate was near $81. The dollar slipped against its Group-of-10 peers in early Asia trading with the risk-sensitive Aussie leading gains. The euro strengthened 0.3% against the greenback, with the Aussie up about 0.5%.
Neither side released the text of the deal but the broad contours had circulated for days. Iran’s Deputy Foreign Minister Kazem Gharibabadi said on state television that the text of the memorandum of understanding will be published following the official signing, scheduled for June 19. Hormuz to reopen The US and Iran will end their competing blockades of Hormuz, one of the world’s busiest waterways. They agreed not to attack each other and to start negotiations on Iran’s nuclear program. Iran would get relief from sanctions targeting its overseas oil sales. While both sides claimed victory, they remain deeply distrustful of each other and grave questions remain about their ability to reach a broader deal. What remains unclear is the view from Israel, where Prime Minister Benjamin Netanyahu’s government jeopardized a signing at the last minute with new attacks on Lebanon. Trump may face severe blowback from Iran hawks at home who worry he’s just punting on the issues such as Iran’s nuclear capability and its ballistic-missile program that were the reasons he began the war in the first place. Economic rewards for Iran? Also unclear is the financial incentives Iran will receive.
The BriefWire