Trump Says U.S. and Iran Near Deal to Reopen Hormuz

President Trump said on Thursday that the United States and Iran were close to signing a peace agreement that could be completed within days, a declaration that raised hopes of a reopening of the Strait of Hormuz and sent oil prices sharply lower, even as Iranian officials cautioned that no final decision had been made.

The proposed arrangement, described in reporting by state media in Iran and by international news agencies as an initial memorandum of understanding, would mark a significant shift from the crisis diplomacy of recent days. Rather than simply preserving a tenuous cease-fire, it points toward a more formal bargain: a 60-day extension of the truce, the reopening of the strategic waterway, the lifting of some U.S. oil sanctions and further negotiations on harder questions, including Tehran’s nuclear program.

Trump said planned new American strikes had been canceled and suggested that a signing could take place soon, possibly in Europe over the weekend. But in Tehran, the response was notably more restrained. Esmaeil Baqaei, a spokesman for Iran’s Foreign Ministry, said no final conclusion had been reached, underscoring the gap that still often separates public optimism from diplomatic reality.

A chokepoint with global consequences

The market reaction was immediate because of what is at stake in the narrow stretch of water between Iran and Oman. The Strait of Hormuz is one of the world’s most important energy corridors, carrying roughly one-fifth of global oil flows, according to the U.S. Energy Information Administration.

On hopes that the passage might reopen under a formal agreement, Brent crude fell about 4.5 percent to $86.31 a barrel, while U.S. benchmark crude dropped roughly 4.3 percent to $83.90. The move reflected more than relief over lower immediate war risk; it also suggested that traders believe a diplomatic opening could restore at least part of the region’s interrupted energy traffic.

Shipping executives signaled a similar view. Lars Barstad, the chief executive of the tanker company Frontline, said many shipowners were effectively waiting for security assessments to improve before sending vessels back through Hormuz. If the threat level is downgraded, he said, traffic could increase quickly.

That does not mean a full recovery would be immediate. Even if governments strike a deal, insurers, shipowners and crews will have to be persuaded that the route is truly safe. Recent violence in and around the shipping lane has raised costs and risks, and the deaths of three Indian seafarers in a strike on an oil tanker this week underscored how quickly the regional confrontation has spilled into global commerce.

More than a cease-fire

The emerging framework matters now because it appears to go beyond the emergency cease-fire diplomacy that had dominated the crisis. A temporary halt in hostilities can freeze a conflict in place. A memorandum tied to shipping access and sanctions relief begins to sketch a political settlement, however provisional.

According to reports on the draft terms, the proposed understanding would immediately reopen Hormuz and remove the U.S. blockade, while linking phased sanctions relief to Iranian compliance. More contentious matters would be deferred to later rounds of talks.

That sequencing is not unusual in high-stakes diplomacy. Negotiators often try first to secure a narrow arrangement that reduces the danger of escalation and restores a measure of economic normalcy, leaving more ideologically charged disputes for later. In this case, that could mean postponing the most difficult nuclear questions in favor of first stabilizing the waterway and reducing pressure on oil markets.

But such an approach also carries risks. Agreements that leave the hardest issues unresolved can create only a brief pause if either side believes it has conceded too much upfront or received too little in return.

The questions still hanging over a deal

For all the upbeat language from Washington, major details remain unsettled. One of the most sensitive points is access to frozen Iranian funds, which has emerged as a key issue in the bargaining. The structure of sanctions relief is also unclear: whether relief would be immediate or phased, what benchmarks Iran would have to meet and how quickly any changes could be reversed if the deal faltered.

Then there is the central political question: whether Iran’s leadership is prepared to endorse what Trump has described. Tehran’s public insistence that no final text has been approved may be a negotiating tactic, an attempt to manage domestic politics or evidence that critical decisions are still unresolved at the top.

Even if an agreement is signed, the practical reopening of Hormuz may prove uneven. The Energy Information Administration has said shipments could begin recovering in the third quarter of this year, but a return to pre-conflict levels may take months, potentially stretching into early 2027. The resumption of normal traffic will depend not only on diplomatic signatures but also on military restraint, insurer confidence and the willingness of commercial carriers to test the route again.

For now, the prospect of a U.S.-Iran accord has offered something that was absent only days ago: the possibility that the crisis may be moving from open confrontation toward a structured, if fragile, settlement. Whether that shift is real will depend on what happens next in Tehran as much as in Washington.