US and Iran Sign Memorandum of Understanding to End War and Reopen Strait of Hormuz

The United States and Iran have electronically signed a historic Memorandum of Understanding (MoU) aimed at ending their three-and-a-half-month war and reopening the Strait of Hormuz. The breakthrough agreement, mediated by Pakistan and Qatar, establishes an immediate ceasefire across all fronts and sets a 60-day clock to negotiate a permanent settlement regarding Tehran's nuclear program.[4][5]

The conflict, which erupted on February 28 following US and Israeli strikes that killed Iranian Supreme Leader Ali Khamenei, had severely disrupted global energy markets. In retaliation, Iran blockaded the Strait of Hormuz, choking off roughly 20% of the world's seaborne oil trade, while the US imposed a counter-blockade on Iranian ports.[6][7]

Under the terms of the new MoU, both blockades will be lifted immediately. US officials confirmed Monday that commercial shipping traffic is already beginning to trickle back through the Strait, though clearing naval mines and restoring full pre-war volume is expected to take up to 30 days.[4][8]

The economic relief provisions are substantial but conditional. The framework outlines a potential $300 billion international reconstruction fund for Iran, financed alongside regional partners. However, the Trump administration insists that any release of frozen assets or sanctions relief will be strictly tied to Iran's verifiable compliance with nuclear restrictions, a point of contention with Iranian officials who expect immediate unfreezing of funds.[5][6][8]

President Donald Trump briefed allied leaders on the agreement Tuesday at the G7 summit in Evian, France. German Chancellor Friedrich Merz strongly welcomed the deal, noting that the immediate drop in global oil prices and rallying stock markets demonstrate the profound economic relief the ceasefire brings to the international community.[1][4]

Despite the optimism in Europe, domestic political hurdles loom in Washington. Trump indicated he would "like" to submit the agreement to Congress for review, a move that could invite fierce opposition. Republican lawmakers, including Senator Lindsey Graham, expressed skepticism about Iran's long-term nuclear commitments but acknowledged that reopening the Strait was "worth a try."[2][3]

The most volatile wildcard remains Israel. The MoU stipulates a ceasefire on all fronts, including Lebanon, where Israeli forces have been engaged in a parallel conflict with Hezbollah. However, Israeli Prime Minister Benjamin Netanyahu publicly distanced himself from the pact, declaring that the agreement "does not bind us" and asserting that Israeli troops will remain in Lebanon and Gaza for as long as necessary.[1][3]

Iranian officials have warned that any continued Israeli military action in Lebanon would constitute a violation of the US-Iran deal, fundamentally linking the two theaters of conflict. This dynamic places immense pressure on the Trump administration to restrain its closest Middle Eastern ally while simultaneously keeping Tehran at the negotiating table.[3][7]

The diplomatic focus now shifts to the Bürgenstock resort in Switzerland, where a formal signing ceremony is scheduled for Friday. From there, negotiators face a grueling 60-day sprint to translate the fragile MoU into a comprehensive treaty that permanently dismantles Iran's nuclear weapons pathways while integrating the war-battered nation back into the global economy.[1][5]