US-Iran Peace Deal: Strait of Hormuz to Reopen Friday

The United States and Iran have agreed to a peace framework that ends their military conflict, lifts the American blockade on Iranian ports, and reopens the Strait of Hormuz to global oil shipments. President Donald Trump announced the completion of the deal on Sunday, which Pakistan Prime Minister Shehbaz Sharif confirmed will be formally signed in Switzerland on Friday.

What does the US-Iran peace framework include?

The immediate terms center on restoring the free flow of commerce. Trump declared that the Strait of Hormuz, a critical global shipping lane choked off by Iran for months, will reopen on Friday. He also ordered an end to the U.S. blockade of Iranian ports. Ships of the World, start your engines. Let the oil flow! Trump wrote on Truth Social.

Markets reacted swiftly to the prospect of renewed supply. Brent crude futures fell 4% in early trading on Monday, while U.S. West Texas Intermediate slid more than 4.6%. For months, the conflict has artificially inflated global energy costs, acting as a de facto tax on consumers worldwide. The reopening of Hormuz is a necessary step to stabilize prices and remove this burden from the global economy.

What are the financial and nuclear terms of the deal?

A senior Iranian official told Reuters that the draft deal requires the United States to release $25 billion in frozen Iranian assets. In exchange, Iran will agree not to produce or acquire nuclear weapons. Iran has also agreed to maintain the nuclear status quo, meaning no uranium enrichment or expansion of nuclear facilities, until a broader agreement is reached during a 60-day ceasefire period.

However, the details on Iran's nuclear stockpile remain contested. A U.S. official claimed the agreement will ultimately lead to the dismantling of Iran's nuclear program, with its highly enriched uranium destroyed and removed. Conversely, an Iranian official stated the draft allows Iran to dilute its enriched uranium inside the country. Iran's deputy foreign minister, Kazem Gharibabadi, confirmed that a more expansive agreement, including sanctions relief and the fate of the nuclear program, will be negotiated during the ceasefire.

How does Israel factor into the Iran deal?

Israel was not a party to the U.S.-Iran agreement and has stated it will retain freedom of military operations in Lebanon. This stance nearly derailed the negotiations. On Sunday, Israel struck the southern suburbs of Beirut, targeting Iranian-backed Hezbollah militants. The attack drew sharp criticism from both Tehran and Washington.

Iranian negotiator Mohammad Baqer Qalibaf stated the strike showed the United States lacks the will and ability to fulfill your commitments. Iran's foreign ministry held the U.S. responsible and warned of a strong response, while its military command said its finger is on the trigger. Trump also condemned the timing, writing that the attack on Beirut should not have happened on a day so close to a peace deal. He later updated Israeli Prime Minister Benjamin Netanyahu on the progress toward the agreement during a phone call.

Domestic pressures shaping the agreement

The war has become a significant political liability for Trump and congressional Republicans ahead of November's midterm elections. Public opinion polls show Americans are deeply frustrated by rising gas prices caused by the conflict. At the same time, Trump faces pressure from within his own party, where hawks insist that Iran's nuclear program must be completely shut down.

Inside Iran, the framework is also facing resistance. At pro-government rallies across the country on Saturday night, hardliners opposed to the deal voiced their dissatisfaction. A resident in the northeastern city of Mashhad reported that some protesters chanted Death to the compromiser, apparently referring to Iranian Foreign Minister Abbas Araqchi.

Will the Strait of Hormuz reopening lower oil prices?

Yes, the immediate reopening of the Strait of Hormuz is expected to lower global oil prices. Brent crude futures fell 4% and U.S. West Texas Intermediate slid more than 4.6% on the news, as the restoration of oil shipments through the critical waterway will ease the global supply constraints that have driven up energy costs.

What happens to Iran's nuclear program under the deal?

Under the current framework, Iran agrees to maintain the nuclear status quo and not produce or acquire nuclear weapons. The ultimate fate of Iran's nuclear program and its stockpile of enriched uranium will be negotiated during a 60-day ceasefire period, with U.S. and Iranian officials disagreeing on whether the stockpile will be removed or diluted domestically.