US and Iran Sign Landmark Deal to End War and Reopen Critical Oil Waterway

A Historic Agreement Takes Shape

A deal between the U.S. and Iran has been signed by President Donald Trump and Iranian President Masoud Pezeshkian, according to officials on both sides. The agreement, months in the making and forged through the fires of open conflict, marks one of the most consequential diplomatic breakthroughs in recent memory. It is a major breakthrough in the conflict that set the Middle East aflame and shook the global economy.

President Donald Trump and Vice President JD Vance both virtually signed the agreement to end a U.S. blockade of Iranian ports, reopen the Strait of Hormuz, and start 60 days of nuclear negotiations, a senior U.S. official said. Parliament Speaker Mohammad Bagher Ghalibaf signed the document for the Iranian side. Pakistan's Prime Minister Shehbaz Sharif, who played a key mediating role in the negotiations, said an official signing ceremony will take place on Friday in Switzerland.

What the Strait of Hormuz Means for the World

Iran has effectively controlled the Strait of Hormuz since shortly after the war began on February 28, virtually shutting down the vital passage for around 20% of the world's oil. Iranian attacks on shipping and the threat to vessels largely closed the strait, drove up energy prices around the world, and made many basics, including food, more expensive. The economic toll on ordinary people — from higher gas prices to pricier groceries — has been severe.

The deal calls for the U.S. to lift its blockade imposed on Iranian ports and for the strait to return to its prewar traffic levels in 30 days, while acknowledging Iranian mines may still be in its waters that need to be destroyed. Markets responded immediately: oil prices settled at their lowest level since early March and the Dow clinched a record high after the announcement, with Brent crude sinking 4.76% to $83.17 per barrel and the Dow gaining 469 points to close at a record 51,671. Still, while Trump declared the Strait of Hormuz has reopened, confidence across the shipping industry remains in short supply due to potential threats that remain, including mines, drones, and missile attacks.

Nuclear Questions and the 60-Day Clock

The U.S. and Iran have agreed to resolve the disposition of stockpiled enriched material pursuant to a mechanism to be mutually agreed upon, with the minimum methodology being down-blending on site under the supervision of the IAEA. Iran has hundreds of pounds of uranium enriched to 60%. U.S. officials framed this as a floor, not a ceiling, for negotiations. One official said, "They're saying we will destroy the enriched stockpile, and this is how we're going to do it at a minimum."

The agreement also states that while sanctions will officially remain in place until a final deal is struck, the U.S. will issue waivers for the export of Iranian oil, petroleum, and derivatives — including banking transactions, insurance, and transportation. The U.S. will also work with regional partners to create a fund of up to $300 billion for reconstruction and economic development for Iran. Trump said the U.S. would not be directly contributing to this fund, though he said it may be possible for other countries to invest in Iran.

Complications Ahead

Iran made an end to fighting between Israel and Hezbollah in Lebanon a condition for the deal, but Israeli Defense Minister Israel Katz said the country would keep troops in southern Lebanon indefinitely, and Israel and Hezbollah have continued to fight daily despite an official ceasefire. Some U.S. foreign policy hawks are worrying that Trump gave away too much in the name of trying to end the war, including GOP Sen. Lindsey Graham, who told reporters he is "skeptical" that Iran will drop its nuclear ambitions.

Officials acknowledged the deal might not even last the full 60 days if the U.S. believes Iran is not serious about nuclear negotiations — but on the other hand, Iran's economic crunch provides a real incentive to reach a full deal that removes sanctions and unfreezes its cash. The next two months will be a defining test of whether this memorandum of understanding becomes a lasting peace — or just the latest pause in a long and costly conflict.