In brief
The US and Iranian presidents signed a memorandum of understanding that will immediately end hostilities and reopen the strategic Strait of Hormuz. The deal includes a $300bn reconstruction fund for Iran, the removal of sanctions, and a commitment to negotiate a final peace treaty within 60 days. Key points still to be worked out are Iran’s nuclear program and the reopening of maritime trade routes. While the agreement may ease oil price pressures, critics debate its strength and the future of sanctions. The US president cautioned that further conflict could bring economic catastrophe, while Iranian officials signal distrust of the US until a final deal is reached.
Peace Deal Signed
US President Donald Trump and Iranian President Masoud Pezeshkian signed a memorandum of understanding in France during the G7 summit. The document takes effect instantly and declares a halt to all military operations.
Key Elements
• The Strait of Hormuz, a key shipping lane that carries about 20%% of global oil, will be reopened for the next 60 days and ships will pass without charges.
• A $300bn reconstruction fund will help rebuild infrastructure in Iran.
• All US sanctions will be dropped for the duration of the agreement.
• Iran commits to "not develop nuclear weapons" and to allow the IAEA to monitor and down‑blend any enriched uranium.
What’s Still in Negotiation
The final nuclear details remain on a 60‑day negotiation timetable. The parties will meet again within that time to decide on the final treaty.
Economic Impact
Oil prices fell after the announcement because the Strait of Hormuz opened again, easing pressure on global markets. However, the prices are still higher than before the conflict.
US and Iranian Reactions
Trump said the deal would stop a "worldwide economic catastrophe" and warned the US could "bomb the hell" out of Iran if no final deal materialises. Iranian parliamentary speaker Mohammad Bagher Ghalibaf announced he would keep a "finger on the trigger" until a final agreement is reached.
Political Reactions
US senators are divided: some accuse the deal of being a bad bargain, while others point to improved stability. The agreement faces scrutiny for its limited scope on regional proxy support and missile programmes.
