The United States and Iran have signed a memorandum of understanding (MoU) to end their war, triggering a 60-day negotiating period aimed at reaching a comprehensive final agreement. The deal's core provisions include the reopening of the Strait of Hormuz — the narrow waterway between the Persian Gulf and the Gulf of Oman through which roughly one-fifth of the world's oil passes — a commitment that Iran will never acquire a nuclear weapon, and the establishment of a $300 billion reconstruction and economic development fund for Iran, to which the US is not required to contribute. A formal signing ceremony had been planned in Switzerland, but was cancelled after both sides signed the agreement remotely; US and Iranian representatives are still expected to meet in Switzerland for further technical talks, though US Vice President JD Vance delayed his planned trip after Iran confirmed it was working through the logistics of when its delegation could depart.

The US Navy lifted its naval blockade of Iran immediately after signing, with US Central Command confirming the move "in accordance with the President's direction" while noting some vessels would remain in the general area. Iran's Supreme Leader Mojtaba Khamenei — who has not appeared in public since taking office in March following the killing of his father and predecessor, Ayatollah Ali Khamenei, in the February US-Israeli strikes that sparked the war — publicly endorsed the deal for the first time, saying he approved it despite holding "a different view," after receiving assurances from President Masoud Pezeshkian that Iranian rights would be protected. Khamenei characterised Trump as having acted "out of desperation" and warned that future negotiations would "not mean acceptance of the enemy's position."

Vance defended the agreement against sharp criticism from both US lawmakers and Israeli officials, stressing that Iran will receive no funds or sanctions relief unless it meets its obligations, including destroying its stockpile of enriched uranium and demonstrating it will not fund regional proxy groups. Republican Senator Bill Cassidy called the deal "the worst foreign policy blunder in decades," arguing that Iran's nuclear ambitions had not been curbed and that Tehran had learned that threatening the strait produces results. Vance directed unusually pointed remarks at critics within the Israeli cabinet, naming national security minister Itamar Ben Gvir and finance minister Bezalel Smotrich, telling reporters that Israel, "a country of nine million people, can't just kill your way out of solving every single national security problem." Both Israel and Hezbollah have continued striking each other since the MoU was announced, with Israeli strikes reported in Lebanon killing three people on Thursday. Vance warned that attacks on Beirut civilians were "not acceptable" and that Israel would have to respect the peace process.

The MoU's economic provisions are complex and their implementation is unlikely to be swift. Iran is claiming access to more than $100 billion in frozen or restricted assets held abroad — the bulk of which sits not in the US but in China, Iraq, Qatar and elsewhere. Washington's leverage derives from secondary sanctions that can penalise any bank or institution that moves Iranian funds without US approval. Experts note that even after an agreement is signed, legal, banking and political obstacles make the rapid release of funds unlikely, a pattern seen after the 2015 nuclear deal when many banks remained cautious. Iranian officials have spoken of wanting access to between $12 billion and $24 billion quickly, but analysts say the full economic benefit will be gradual and partial.

The reopening of the Strait of Hormuz has already pushed oil prices lower from levels that had driven petrol prices toward record highs in North America, but analysts warn that global shipping will take months — and possibly close to a year — to fully normalise. During the blockade, traffic through the strait fell from roughly 100 vessels per day to around six at its peak, leaving more than 1,500 ships waiting to pass and stranding an estimated two million shipping containers out of position worldwide. Mine clearance alone could take up to six months, keeping war-risk insurance premiums elevated in the meantime. Major carriers that restructured their routes around Africa's Cape of Good Hope will not simply snap back overnight. Analysts who have studied the aftermath of previous maritime crises, including the reopening of the Bab el-Mandeb chokepoint at the southern end of the Red Sea after Houthi attacks were resolved in late 2025, suggest that full recovery at the world's key transshipment ports is unlikely before late 2026 at the earliest.