The United States and Iran have tentatively agreed to prolong a delicate ceasefire in their ongoing three-month conflict, extending it for an additional 60 days. This agreement also includes reopening the crucial Strait of Hormuz and laying groundwork for more comprehensive discussions regarding Iran’s nuclear ambitions, as reported by U.S. officials.
Both parties’ negotiators are diligently working to finalize the details of this memorandum of understanding (MOU), which is pending approval from President Trump. Meanwhile, despite these efforts, Iranian state media reports that the deal is not yet finalized from their side as well.
The situation in the Persian Gulf intensified recently following U.S. military actions described as “defensive strikes” in southern Iran. In retaliation, Tehran launched ballistic missiles targeting Kuwait.
Should this agreement proceed, it would represent the most significant step towards a lasting resolution since hostilities erupted in late February. Nonetheless, it remains a far cry from the comprehensive objectives articulated by Trump at the onset of the conflict.
Here are five key insights into the proposed agreement:
Strait of Hormuz reopens
The memorandum would reopen the Strait of Hormuz to international shipping traffic, according to U.S. sources, a step that would help ease the economic pressure on both sides.
The strait emerged as a flashpoint early in the war, with the U.S. and Iran locked in a struggle for control of the strategic waterway through which roughly one-fifth of the world’s oil supply flows daily.
The channel was fully open to commercial shipping traffic before the start of the war, but Iran closed it off as one of its first retaliatory acts, implementing a blockade that has roiled the global market for oil and related industries like fertilizer.
Axios reported that “unrestricted” transit would be restored under the deal, with Iran committing not to impose tolls on ships attempting to pass through. Tehran would also be required to remove all its mines from the strait within 30 days.
The U.S. would gradually lift its naval blockade in exchange for Iran loosening its grip on the strait. Sanctions waivers would also be issued, allowing Tehran to resume selling its oil.
“The strait’s got to be open to everybody; it’s international waters,” Trump told reporters during a Cabinet meeting Wednesday. “We’ll watch over it, but nobody’s going to control it. That’s part of the negotiation that we have.”
Oil prices falling
Oil prices dipped Thursday as reports of a tentative deal began to emerge.
Brent crude, the international benchmark, was trading at about $94 per barrel as of Thursday afternoon, down from about $96 per barrel earlier in the day. U.S. benchmark West Texas Intermediate crude was around $89 per barrel, down from about $91 per barrel.
Oil prices have spiked since the start of the U.S.-Iran war following the effective closure of the strait, which has strained global supply and pushed domestic gas prices to near record-highs.
Drivers were paying an average of $4.43 per gallon for gas nationwide as of Thursday afternoon, according to AAA, down about 12 cents from the previous week.
“Much of the decline came after renewed optimism surrounding a potential U.S.-Iran agreement pushed oil prices lower, easing geopolitical pressure on energy markets,” Patrick De Haan, the head of petroleum analysis at GasBuddy, wrote in a Tuesday blog post.
“While uncertainty remains elevated, the market appeared more confident that immediate worst-case supply scenarios may be avoided,” De Haan added. “That said, volatility remains firmly entrenched, with oil prices still reacting sharply to every new headline tied to negotiations and regional developments.”
High gasoline prices have been a major source of political pressure on Trump and Republicans ahead of this year’s midterm elections.
A Quinnipiac University poll conducted last month found that more than half of registered voters blamed Trump “a lot” for rising gas prices, while 14 percent blamed him “some.”
Nuclear specifics TBD
The proposed memorandum leaves some open questions about the fate of Tehran’s nuclear program and stockpiles, which has long been a sticking point in the negotiations.
Senior Trump administration officials justified the war from the outset as primarily being about stopping Iran from obtaining a nuclear weapon, arguing that the country posed an “imminent threat” to the U.S.
Iran has continually rejected demands to halt uranium enrichment, insisting that its program is intended for peaceful purposes, such as energy production.
Sources said the MOU would include a pledge from Tehran that it will not seek to develop a nuclear weapon, while opening a new round of talks to negotiate the matter further.
Addressing Iranian enrichment and how to dispose of its existing stockpile of highly enriched uranium would be the first issues discussed during the 60-day ceasefire extension window, according to Axios.
Treasury Secretary Scott Bessent told reporters in a Thursday briefing that there would be no sanctions relief until “Iranians agree that they have to turn over the highly enriched uranium.”
Trump in a Truth Social post said Monday the “nuclear dust” could either be turned over to the U.S. or destroyed “at another acceptable location.”
Both sides say deal not done
Though negotiators have agreed to terms of the 60-day deal, both sides are leaving some wiggle room, saying neither Trump nor Iranian leadership have officially signed off yet.
Trump said over the weekend that a “largely negotiated” proposal was on the table and an announcement should be coming soon. But Secretary of State Marco Rubio hinted at delays while speaking to reporters in India on Tuesday, saying it could be “a few more days” before the details are ironed out.
“I mean, when you get down on some of these things, you’ve got to hear back, and it takes the Iranians – takes them a little while longer to get back,” Rubio said at Palam Air Base in New Delhi.
The Tasnim News Agency, which is affiliated with the Islamic Revolutionary Guard Corps (IRGC), reported Sunday that there were still a few unresolved issues in the possible memorandum, according to Iran International.
Tasnim quoted officials Thursday saying Iran would announce a deal through Pakistan, which has been mediating talks.
Reuters also reported this week that the release of billions in frozen Iranian funds had been a point of contention standing in the way of a final agreement.
Iranian President Masoud Pezeshkian has reportedly said that no major decision would be made without the approval of Supreme Leader Mojtaba Khamenei, who has not been seen in public since he was injured in a strike on the first day of the war.
Unclear if Congress will have say
The prospect of a deal has received mixed reactions from lawmakers on Capitol Hill, and it remains unclear whether Congress will ultimately get a say in what happens.
Some more hawkish Republicans have expressed skepticism about the terms of the memorandum, arguing that any deal that allows the current Iranian regime to remain intact and in power could undermine the U.S. military operation and embolden the country’s theocratic leaders.
Sen. Ted Cruz (R-Texas) said Saturday that Trump’s decision to strike Iran in February was the “the most consequential” of his second term, raising concerns that the “extraordinary military results” it achieved could all be for naught.
Others, meanwhile, have urged their colleagues to be patient and allow the president time to work out the details.
“War virtually always ends with negotiations,” Sen. Rand Paul (R-Ky.), an outspoken critic of the war, wrote on Sunday. “Critics of President Trump’s peace negotiations should give President Trump the space to find an American First solution.”
Sen. Lindsey Graham (R-S.C.) has called for any peace deal to be brought before Congress for a vote, saying the process used to “test the Obama Iranian deal is a sound way forward.”
“Fair and challenging questions with a full opportunity to explain, and a healthy dose of sunlight is generally the right formula to understand any matter,” he wrote in early April.
Congressional involvement in approving the deal likely hinges on what exactly it stipulates.
The Iran Nuclear Agreement Review Act of 2015 “prevents the president from waiving or suspending [existing statutory] sanctions before Congress has the chance to vote on an agreement, if one is reached, and allows Congress to permanently remove these authorities if it disapproves of the deal over a presidential veto,” according to the Senate Foreign Relations Committee.
It also requires the president to submit within five days a proposed nuclear agreement with Iran to Congress for review.
Rachel Frazin contributed.