The U.S. and Iran said they have agreed terms to end their war and reopen the Strait of Hormuz, news that brought relief to markets worldwide, although the pact may hinge on events in Lebanon and defers tricky talks on Tehran’s nuclear programme.
The framework deal marks the biggest breakthrough towards resolving a war that began with joint U.S.-Israeli strikes on Iran in February before escalating into a wider regional conflict that has killed thousands, upended energy markets and stoked recession fears for the global economy.
“The Deal with the Islamic Republic of Iran is now complete,” U.S. President Donald Trump wrote on his Truth Social platform at around 5:30 p.m. in Washington (2130 GMT) on Sunday.
The memorandum of understanding is scheduled to be officially signed on Friday in Switzerland.
Leaders around the world welcomed the announcement on Monday as details of the terms began to emerge.
Though the text was not yet published, its apparent call for hostilities to cease more broadly could be tricky for Israel, which was not part of the negotiations and has been waging war in Lebanon against the Iran-aligned Hezbollah group.
“Lebanon is an integral part of the agreement to end the war,” Iran’s foreign ministry spokesperson Esmaeil Baghaei said, adding the text calls for an end to war on all fronts, as well as the respect of Lebanon’s territorial integrity.
Leaders of the Group of Seven wealthy nations, including Trump, are due to arrive at a French lakeside resort on Monday.
While the U.S. and Iran had largely ceased hostilities in early April to engage in negotiations, fighting has not ceased in Lebanon, where Hezbollah opened fire on Israel in support of Tehran on March 2 and Israel responded with an air campaign and ground invasion that has uprooted some 1.2 million people.
Iran’s Foreign Minister Abbas Araqchi said there must be a complete halt to Israeli attacks against Lebanon and wrote on Telegram that the U.S. bears responsibility for implementing the framework deal.
Hezbollah welcomed the deal and said the inclusion of Lebanon reflected Iran’s commitment to securing a halt to the war and preserving Lebanon’s rights.
After the deal was announced, the pace of Israeli attacks in Lebanon decreased dramatically, Lebanese and foreign security sources told Reuters.
Earlier, a Hezbollah official told Reuters that the group has not carried out any operations since the deal was announced and that its position on the ceasefire was linked to Israel’s adherence to it.
Trump said before the memorandum was announced that there should be no more Israeli attacks on Lebanon or Hezbollah attacks on Israel.
Israeli Prime Minister Benjamin Netanyahu has yet to respond publicly to the U.S.-Iran agreement. But Defence Minister Israel Katz said that Israel would remain “indefinitely” in areas it is occupying in southern Lebanon to eliminate what it perceives as militant threats.
Privately, Israeli officials’ views of the deal have been negative. One senior Israeli official told Reuters on condition of anonymity that the agreement was “terrible for Israel,” and that this assessment was shared throughout the government from Netanyahu on down.
Trump said the Strait of Hormuz, a major shipping route for global oil and gas supplies that Iran has effectively shut for months, would open on Friday, and that he had ordered the end of a U.S. blockade of Iranian ports.
“Ships of the World, start your engines. Let the oil flow!” he wrote on Sunday. On Monday he said traffic was already resuming: “Ships are starting to move, many loaded up with Oil, out of the Strait of Hormuz.”
Oil prices fell, though shippers remained cautious and ensuring the waterway is clear of mines could take weeks. Brent crude futures fell some 5% on Monday while stock markets jumped.
France and Britain are ready to lead a mission in the strait, with the support of the Netherlands and Italy, to help reopen the sea lane after the deal becomes a reality, French President Emmanuel Macron said on Monday.
U.S. Vice President JD Vance said he hopes the text of the agreement will be released this week, as further negotiations over the deal’s details were set to continue.
“Our expectation is that the Strait is going to be opened in a toll-free way for the long-term,” he told CNBC. “That’s the sort of thing that we’re going to figure out in these technical negotiations.”
Iran’s Fars news agency, citing an informed source, said the draft deal recognizes Iranian-Omani authority over navigation services in the strait. Tehran had agreed to allow free passage only for 60 days, after which it plans to collect revenue.
The war has become a political liability at home for Trump, with Americans deeply frustrated by rising gas prices ahead of November’s midterm elections.
But Trump has also faced pressure from members of his own party who insist that Iran’s nuclear programme must be completely shut down.
