US, Iran reach agreement to end war, signing set for Friday

DUBAI/WASHINGTON - U.S. and Iranian officials said they had agreed on a framework to end their war, halt the U.S. blockade of Iran and reopen the Strait of Hormuz, a preliminary pact that sent oil prices falling but leaves the fate of Iran’s nuclear program to further negotiations.

“The Deal with the Islamic Republic of Iran is now complete,” President Donald Trump wrote on his Truth Social platform around 5:30 p.m. ET local time in Washington on Sunday. His post came shortly after Pakistani Prime Minister Shehbaz Sharif, whose country has served as a mediator, announced a deal had been struck early on Monday local time.

The memorandum of understanding is scheduled to be officially signed on Friday in Switzerland.

The precise terms were not immediately known. Sharif said in a post on X that the pact called for “the immediate and permanent termination of military operations on all fronts, including in Lebanon.”

A senior Iranian official told Reuters a final draft of the memorandum covered a range of issues, from Tehran’s nuclear work to reopening the Strait of Hormuz and U.S. waivers on oil sanctions, with a final deal to be discussed in the 60 days following agreement by the two sides.

On the Strait of Hormuz: 

▪ Iran immediately reopens the Strait of Hormuz to all commercial vessels, while the U.S. lifts its naval blockade on Iranian ports. The lifting of the U.S. blockade would begin immediately after the memorandum is signed and be completed within 30 days.

On financial terms

▪ The U.S. agrees not to impose any new sanctions on Iran until a final deal is reached. 

▪ Following a final agreement, all U.S. and U.N. sanctions on Iran would be lifted according to an agreed timetable.

▪ The U.S. will waive oil sanctions on Iran for a specified period, allowing Tehran to sell oil and receive revenue.

▪ The U.S. agrees to release $25 billion of Iran’s frozen assets, including via direct cash transfers, cooperation among regional countries, and financial credit lines. The Trump administration has previously said any release of Iranian money would only take place once Iran has fulfilled certain conditions under a peace deal.

▪ Washington, in coordination with its regional allies, would prepare a reconstruction and development plan for Iran, to be negotiated and agreed with Tehran within 60 days.

On Iran’s nuclear program:

▪ Tehran agrees that it will neither produce nor acquire nuclear weapons.

▪ Pending a final agreement, Iran would maintain the current status of its nuclear program, refraining from further uranium enrichment and expansion of nuclear facilities.

▪ The United States agrees to allow Iran to dilute its stockpile of highly enriched uranium on Iranian soil under a future comprehensive agreement. 

▪ Iran’s nuclear program, uranium enrichment activities and mechanisms for handling its stockpile of highly enriched uranium would be negotiated within 60 days of the memorandum and addressed in a final agreement.

Strait to reopen

Trump said the Strait of Hormuz, a major shipping route for global oil and gas supplies that Iran has effectively shut down for months, would open on Friday, and that 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.

In an interview with The New York Times on Sunday afternoon, the president said that the deal he had reached with Iran would ultimately assure that the waterway was “permanently toll free.”

Oil prices fell on the news. Brent crude futures fell 4% in early trading on Monday, while U.S. West Texas Intermediate slid more than 4.6%. Stock markets in Asia jumped.

Former Biden administration State Department spokesperson Matthew Miller said Trump had made important concessions to Iran to achieve the status quo that existed before he launched 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,” said Miller.

Thousands of people have been killed, mostly in Iran and Lebanon, since U.S. and Israeli forces first attacked Iran on Feb. 28. Iran has struck Israel and Gulf states hosting U.S. bases and has effectively blockaded the Strait of Hormuz, pushing up global energy prices. U.S. forces have blocked Iranian ports in response.

The Iran war has become a political liability at home for Trump and his fellow Republicans in Congress, with public opinion polls showing 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 program must be completely shut down.

Republican Sen. Lindsey Graham, a leading Iran hawk, praised the deal but said he would be “watching closely” the coming negotiations on Iran’s nuclear program.

“Under our law, any nuclear deal with Iran will be sent to Congress for review and a vote,” he said. “Congratulations to all in getting us to this point.”

During his first term, Trump withdrew the U.S. from a 2015 multilateral Iran deal, negotiated by Democratic President Barack Obama, that lifted sanctions on Tehran in exchange for limits on its nuclear program, including international inspections.

Iran responded by ramping up its enrichment of uranium, producing around 900 pounds of material at close to bomb-grade purity. The eventual fate of that uranium is likely to be a key negotiating point during the upcoming talks.

‘A very difficult guy’

Lebanon has been a sticking point in negotiations, with Israel and Hezbollah ignoring calls from Trump and others to stop their attacks on each other in recent weeks.

There was no immediate reaction to the announcement from Israel, which has said it was not party to the U.S.-Iran talks.

The agreement was sealed despite an Israeli strike on Lebanon on Sunday that drew criticism from both Iran and Trump.

Israel said its military attacked Hezbollah targets in Beirut’s southern suburbs after the Iran-aligned armed group fired into Israeli territory. The Lebanese state news agency NNA said two people were killed and four others wounded in the strike, which targeted an apartment in Dahiyeh.

The Israeli military said earlier that Hezbollah had launched three projectiles towards communities in northern Israel, calling it a blatant ceasefire violation.

Prime Minister Benjamin Netanyahu has differed with Trump over American demands that Israel curb its military action in Lebanon to allow the United States to reach a deal with Iran.

Israel has said it will retain freedom of operations in Lebanon, while Iran has made a full ceasefire there an important component of its demands.

Trump updated Netanyahu on the progress toward a peace deal during a phone call on Sunday, Israel’s N12 reported, citing a senior official.

In an interview with the New York Times, Trump called Netanyahu “a very difficult guy” and argued the Israeli leader should thank him for saving Israel from a nuclear-armed Iran.

Leaders outside the Middle East, who have kept a wary eye on the conflict, welcomed the announcement.

In a joint statement, the United Kingdom, Germany, France and Italy said they were prepared to lift sanctions on Iran in response to “clear, verifiable steps” to limit its nuclear program.

“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.”

Before the deal was announced, a senior Iranian official told Reuters that, under the terms of the draft, the United States would agree to release $25 billion of frozen Iranian assets. 

A U.S. official, also speaking before the announcement, said the agreement would ultimately lead to the dismantling of Iran’s nuclear program, with its stockpile of highly enriched uranium to be destroyed and removed.

Copyright Reuters or USA Today Network via Reuters Connect.