The United States and Iran have agreed on a preliminary framework aimed at ending their war, lifting the U.S. blockade of Iranian ports and reopening the Strait of Hormuz.
The agreement triggered an immediate market reaction, with oil prices falling in early trading. However, the future of Iran’s nuclear programme remains unresolved and will be left to further negotiations.
“The Deal with the Islamic Republic of Iran is now complete,” U.S. President Donald Trump wrote on his Truth Social platform at about 5:30pm ET on Sunday.
His announcement came shortly after Pakistani Prime Minister Shehbaz Sharif said a deal had been reached early on Monday local time. Pakistan has served as a mediator in the talks.
The memorandum of understanding is expected to be formally signed on Friday in Switzerland.
Terms of Deal Still Unclear
The precise terms of the agreement were not immediately available.
Sharif said in a post on X that the pact provides for “the immediate and permanent termination of military operations on all fronts, including in Lebanon.”
Lebanon has been one of the difficult issues in the negotiations. Israel and Hezbollah have continued attacks in recent weeks despite calls from Trump and others for a halt.
Iran’s Supreme National Security Council said in a statement that war and military operations on all fronts, including Lebanon, would end permanently from Monday night.
Iran’s deputy foreign minister, Kazem Gharibabadi, said a wider agreement would be negotiated during a 60-day ceasefire period.
He said the talks would include sanctions relief for Iran.
Sources previously told Reuters that the future of Iran’s nuclear programme would also be handled in the later negotiations.
Israel, which has said it was not part of the U.S.-Iran talks, did not immediately react to the announcement.
Strait of Hormuz to Reopen
Trump said the Strait of Hormuz would reopen on Friday.
The waterway is a major route for global oil and gas supplies. Iran had effectively shut it down for months during the conflict.
Trump also said he had ordered the end of the U.S. blockade of Iranian ports.
“Ships of the World, start your engines. Let the oil flow!” Trump wrote.
Oil prices dropped after the announcement. Brent crude futures fell 4 percent in early Monday trading, while U.S. West Texas Intermediate declined by more than 4.6 percent.
Asian stock markets also rose as investors responded to the prospect of easing energy disruptions.
Critics Question Nuclear Guarantees
Former Biden administration State Department spokesperson Matthew Miller said Trump had made major concessions to Iran to return to the situation that existed before the war.
“We have no assurances the nuclear program will ever be addressed, but Iran has shown the world it can take the global economy hostage and get something from the U.S. in return,” Miller said.
Thousands of people, mostly in Iran and Lebanon, have been killed since U.S. and Israeli forces first attacked Iran on February 28.
Iran later struck Israel and Gulf states hosting U.S. bases. It also effectively blockaded the Strait of Hormuz, pushing up global energy prices.
U.S. forces responded by blocking Iranian ports.
The war has become a political burden for Trump and Republicans in Congress. Public opinion polls have shown growing frustration among Americans over rising fuel prices ahead of November’s midterm elections.
At the same time, Trump has faced pressure from members of his party who want Iran’s nuclear programme completely shut down.
Republican Senator Lindsey Graham, a leading Iran hawk, praised the agreement but said he would closely monitor the next stage of talks.
“Under our law, any nuclear deal with Iran will be sent to Congress for review and a vote,” Graham said. “Congratulations to all in getting us to this point.”
Nuclear Programme Remains Central Issue
During his first term, Trump withdrew the United States from the 2015 multilateral Iran nuclear deal.
That agreement, negotiated under Democratic President Barack Obama, lifted sanctions on Tehran in exchange for limits on Iran’s nuclear programme and international inspections.
Iran later increased uranium enrichment. It produced more than 400kg, about 900 pounds, of material close to bomb-grade purity.
The final status of that uranium stockpile is expected to be a major issue in the upcoming talks.
Before the announcement, a senior Iranian official told Reuters that the draft agreement would require the United States to release $25 billion in frozen Iranian assets.
The Trump administration has previously said any release of Iranian funds would depend on Iran meeting conditions under a peace deal.
A U.S. official, also speaking before the announcement, said the agreement would ultimately lead to the dismantling of Iran’s nuclear programme.
The official said Iran’s highly enriched uranium stockpile would be destroyed and removed.
However, the senior Iranian official said the draft would allow Iran to dilute enriched uranium inside the country. Iran denies seeking a nuclear weapon.
Israel-Lebanon Tensions Complicate Deal
The agreement was reached despite an Israeli strike on Lebanon on Sunday.
The strike drew criticism from both Iran and Trump.
Israeli Prime Minister Benjamin Netanyahu has disagreed with Trump’s push for Israel to reduce military action in Lebanon so Washington can complete a deal with Tehran.
Israel has said it will retain freedom of operation in Lebanon.
Iran, however, has insisted that a full ceasefire there must form part of any agreement.
Israel’s N12 reported that Trump briefed Netanyahu by phone on Sunday about progress toward a peace deal, citing a senior official.
In an interview with the New York Times, Trump described Netanyahu as “a very difficult guy.”
He also argued that the Israeli leader should thank him for saving Israel from a nuclear-armed Iran.
European Leaders Welcome Announcement
Leaders outside the Middle East welcomed the announcement while stressing that Iran’s nuclear programme must still be addressed.
The United Kingdom, Germany, France and Italy said in a joint statement that they were prepared to lift sanctions on Iran in response to “clear, verifiable steps” to limit its nuclear programme.
“We are clear that toll-free freedom of navigation must now be restored in the Strait of Hormuz,” British Prime Minister Keir Starmer said. “Iran must never have a nuclear weapon.”
The coming 60-day ceasefire period is now expected to test whether the preliminary deal can move from a framework into a durable settlement.