U.S.-Iran peace deal in sight as Strait of Hormuz set to reopen, clearing the way for oil to flow globally

U.S. and Iranian officials said they had agreed on a framework to end their war, halt the U.S. blockade of Iran and reopen the Strait of Hormuz, a preliminary pact that sent oil prices falling but leaves the fate of Iran's nuclear program to further negotiations.

"The Deal with the Islamic Republic of Iran is now complete," U.S. President Donald Trump wrote on his Truth Social platform around 5:30 p.m. ET local time in Washington (2130 GMT) on Sunday. His post came shortly after Pakistani Prime Minister Shehbaz Sharif, whose country has served as a mediator, announced a deal had been struck early on Monday local time.

The memorandum of understanding is scheduled to be officially signed on Friday in Switzerland.

The precise terms were not immediately known. Sharif said in a post on X that the pact called for "the immediate and permanent termination of military operations on all fronts, including in Lebanon."

Lebanon has been a sticking point in negotiations, with Israel and Hezbollah ignoring calls from Trump and others to stop their attacks on each other in recent weeks. 

In a statement, the secretariat of Iran's Supreme National Security Council said war and military operations on all fronts, including Lebanon, would end permanently starting on Monday night. 

There was no immediate reaction to the announcement from Israel, which has said it was not party to the U.S.-Iran talks. 

Hormuz to reopen

Trump said the Strait of Hormuz, a major shipping route for global oil and gas supplies that Iran has effectively shut down for months, would open on Friday, and that he had ordered the end of the U.S. blockade of Iranian ports.

"Ships of the World, start your engines. Let the oil flow!" Trump wrote.

Oil prices fell on the news. Brent crude futures fell 4% in early trading on Monday, while ​U.S. ⁠West Texas Intermediate slid more than 4.6%. Stock markets in Asia jumped.

Former Biden administration State Department spokesperson Matthew Miller said Trump had made important concessions to Iran to achieve the status quo that existed before he launched the war.

"We have no assurances the nuclear program will ever be addressed, but Iran has shown the world it can take the global economy hostage and get something from the U.S. in return," said Miller.

Iran's deputy foreign minister, Kazem Gharibabadi, said a more expansive agreement would be negotiated during a 60-day ceasefire period, including sanctions relief for Iran.

The fate of Iran's nuclear program, another thorny issue, will also be addressed in those later talks, sources previously told Reuters.