Washington and Tehran have agreed to a framework to halt the weapons and restart the world's most important oil artery. What they have not done is solve one structural issue which caused the war in the first place.

Here goes the sea route for maritime oil trade.

About 27% of the world's maritime oil trade transits through the 21-mile-wide chokepoint between Iran and Oman called the Strait of Hormuz. The IEA noted that Iran's closure of the waterway in March 2026 caused the biggest supply disruption in oil market history. Illustration: Created for use in a publication. No copyright claimed.

In geopolitics, there are times when things appear to be a win from afar and a much more complex picture from closer range. One of them is Sunday evening, when the United States and Iran announced a framework agreement to end over 100 days of war, to be formally signed on June 19 in Geneva. Donald Trump took to Truth Social to inform the world's ships to "start your engines. The Pakistani PM released a statement on social media. Oil futures fell over 4%. Iran's deputy foreign minister affirmed "the immediate and permanent end of the war on all fronts, including Lebanon. It appears to be the making of history from 30,000 feet.

In Jerusalem, where Israeli officials were told about the deal not by their own government but by foreign leaders and wire services, the picture is a bit less euphoric.

The pact is actually a Memorandum of Understanding, one which will be signed by US Vice President JD Vance and Iran's parliament speaker Mohammad Ghalibaf, and which is quite ambitious for a deal whose final text has yet to be published. It lifts the U.S. naval blockade of Iranian ports, opens the Strait of Hormuz to international shipping, suspends military operations on several fronts, including Lebanon's current Israel-Hezbollah conflict, and requires Iran to halt uranium enrichment and not seek nuclear arms for 60 days to be used in final negotiations. It also unlocks at least $12 billion in frozen Iranian assets, with a further $12 billion to come but that's been disputed by the Trump administration, which has already said it will not allow any funds to flow until Iran meets certain conditions. The difference between the statements made by Tehran and the ones confirmed by Washington is already apparent, and the formal signing is five days away.

The Strait of Hormuz (GOT) is a global oil trade.

Share of world's seaborne crude & LNG passing through the Strait before the 2026 conflict

Via Hormuz 27%

Other routes 73%

The trajectory of the price of Brent Crude.

To understand the significance of the Strait of Hormuz in this agreement one must factor in the cost of the Strait of Hormuz's closure. Prior to the outbreak of hostilities in late February, just before a joint U.S.-Israeli attack that killed Iranian Supreme Leader Ayatollah Ali Khamenei, about a quarter of the world's maritime oil traffic ran through that 21-mile wide channel between Iran and Oman. It was the biggest single supply disruption in the history of the global oil market, according to the International Energy Agency, when Iran shut it down in early March. Brent crude jumped above $120 a barrel. US gas prices surpassed $4 per gallon for the first time in four years, rising almost 35% since the beginning of the conflict. The combined reduction in the output from Kuwait, Iraq, Saudi Arabia and the UAE at the height of the disruption was at least 10 million bpd. Force majeure was declared by QatarEnergy on all exports. The price of shipping insurance skyrocketed. The countries that had no energy reserves and little or no diplomatic leverage – those that could least absorb the shock took the hardest hit and had the least voice in the outcome.

Oil's response on Monday, which saw Brent drop 4% and WTI 4.6% in early trading, doesn't appear to have been a surprise, but rather a collective exhale. As the optimism of the deals grew over the preceding weeks, prices had already declined about 20% from their peak of 2026. What Sunday's announcement did was speed up the process of de-commoditisation of the energy markets for the war premium. But analysts at the International Capital Markets Association caution that the reopening will be a partial one: Gulf refinery and pipeline facilities suffered serious damage during the conflict; tanker security and insurance costs will stay high for months; and one oil industry analyst said market normalization probably won't happen until the fourth quarter, uncomfortably near November's midterm elections.

There is a huge sign on every street corner, literally every commute to work is a reminder of the prices of gas.

The Republican strategist was speaking on the condition of anonymity to Reuters in March 2026.

That is no coincidence in the timing of the midterm elections for this tale. When prices of natural gas jumped 35 percent in battleground states like Pennsylvania, Ohio, Georgia and Michigan, the Iran conflict became a domestic economic issue that threatened the Republican domination of Congress. But ads at the pump were already running by Democratic challengers. There were reportedly angry Republican voters out at GOP canvassers in their own districts. The end of the war and the opening of the Strait is a domestic political need, as well as a diplomatic success. The November 3 midterm elections are a silent co-sponsor of this deal.

The financial structure of the deal is not as clear as Trump's tweets on Truth Social indicate. Since the Obama era nuclear deal was pulled back by Trump in 2018, and Iran has faced decades of sanctions as well as banking restrictions, over $100 billion is estimated to be held in foreign assets frozen in Iran. Having partial access to $12 billion alone will tangibly improve the foreign currency reserves of the Central Bank of Iran, mitigate the chronic fluctuations in the Iranians' daily lives, which have been detrimental to ordinary Iranians, and enable Tehran to cover the costs of repairing infrastructure and resume industrial imports. This may have a huge impact in a number of economic areas, according to economists. However Trump's asset-release terms have been contradicted publicly, by his own tweet, "no money will be exchanged, until further notice," and by Iranian media, which in repeated statements continues to quote $12 billion as a down-payment. This is no rhetorical contradiction, but is a real internal debate going on inside the administration, between the officials who wish the agreement would seem to be clinching, and those who don't want to seem as if they are rewarding Tehran before Iran does much of anything.

The MOU's contents (and provisions)

The conditions of the Memorandum of Understanding that was signed between the United States and Iran on June 2026. Red = confirmed. Amber = disputed or deferred.

✓ Confirmed

If signed in Geneva, Switzerland, on June 19, Strait of Hormuz reopens.

✓ Confirmed

Immediate lifting of naval blockade on Iranian ports by the US on signing.

✓ Confirmed

Stopping of military operations including Lebanon ceasefire, immediately and permanently.

✓ Confirmed

Iran promises never to make nuclear weapons; enrichment is on hold during 60-day negotiations.

⚠ Disputed

Frozen Iranian assets will be released, a move that Iran welcomes and the US says it will allow, provided certain conditions are met.

⚠ Deferred

Disposal of ~2000 kg enriched uranium stockpile (including) Uranium 20% enriched (450 kg at 60% purity) under negotiation

⚠ Unresolved

Iran's ballistic missile program, IRGC, Hezbollah and regional proxies (not addressed).

⚠ Ambiguous

Suspension of oil & energy sanctions: Iranian media reports say yes, but the White House hasn't confirmed it.

The focus should be more on the role played by Pakistan as a mediator. Islamabad, along with Qatar with the backing of Saudi Arabia and Turkey, gave the channel neither Washington nor Tehran could maintain on its own. Foreign Minister Ishaq Dar of Pakistan expressed hope that the agreement will add "much-needed confidence and stability" to the global markets and the world economy, especially in developing countries. There is a sharp framing of that. The Geneva signing will be the highest level meeting between Iranian and American officials since the Islamic Revolution of 1979, which took place in the nearby town of Évian-les-Bains. That's huge, irrespective of what the MOU does or doesn't do. The UN secretary-general termed it a "critical step. Britain, France, Germany and Italy were prepared to lift the sanctions and help to achieve a long-term settlement. The prevailing sentiment around the world is a sense of relief. There is a difference between relief and resolution.

The Israeli Dimension

And then there is Israel. The war's co-author, the country that was at the table in February with the United States when Khamenei was knocked aside and the entire regional dominoes were toppled, is not at the table when the peace is being written. Official Israeli sources did not know of the deal, but rather it was discovered through foreign governments and news wires. The MOU provides far less than was sought when the war started. Iran's ballistic missile program, the same missiles that hit Israeli civilian areas in Haifa and other locations killing 21 people, is not covered by this agreement. Ceasefire, not dismantling Iran's regional proxy network -Hezbollah in Lebanon, militias in Iraq, Houthis in Yemen. The IDF will keep its presence in its Lebanon posts in the south, Defense Minister Israel Katz said Monday, even if the MOU dictates otherwise. The deal involved Lebanon and Israel was not consulted, nor was it bound by that inclusion.

The personal split between Trump and Netanyahu has now been revealed. In response to drone attacks on northern Israeli communities, Israel attacked a position in Beirut on Sunday that is believed to have been a Hezbollah base. Trump told Axios, "Netanyahu has no fing judgment. He told The New York Times that Israel should be "very thankful" to him and that Netanyahu "is a very difficult guy. Former IDF chief Gadi Eisenkot said the deal was “the dismal result of a failed government,” as Netanyahu's government pledged to deliver “total victory” but the agreement does not. Finance Minister Bezalel Smotrich stated that it is "bad for Israel and for the entire free world. Left for weeks to push Trump to restore full military activity in order to bring down the Iranian regime, Netanyahu got the opposite. CNN reports sources say the prime minister is concerned that the pact would allow Iran's enriched uranium, missile program and proxies to remain largely intact while helping to alleviate economic pressures on Tehran. That's exactly what it has done.

The situation is equally complicated within Iran. Hardliners in northeast city Mashhad were already chanting "death to the compromiser" in reference to Foreign Minister Abbas Araghchi, the negotiator of the terms at pro-government rallies over the weekend. On Monday, Iran's military announced that it had “humiliated” the U.S. and Israel. The new IRGC chief is said to have repeatedly overruled the civilian Iranian leadership in the negotiations, urging more extreme stands. An enemy is being humiliated with a peace deal described by its own military as a humiliating peace deal is not being signaled by a government.

The Nuclear Question Deferred, Not Resolved

The Outstanding Issue in Iran is its Enriched Uranium Stockpile.

Estimates of quantities at various levels of enrichment as of June 2026. The main issue yet to be decided in upcoming 60-day negotiations is what will happen to this material.

60% enrichment (near bomb-grade) ~450 kg

20% enrichment ~600 kg

Low-enrichment (under 5%) ~950 kg

The nuclear issue that started all this it's still unresolved formally. Iran has some 2,000kg of enriched uranium, of which about 450kg is enriched to 60%, which remains on Iranian soil. The MOU stipulates that Iran will freeze enrichment and that it will not seek a nuclear weapon, though it does not specify what would happen to the enrichment once the 60-day talks begin after the Geneva deal. US officials say the February actions have successfully demolished most of the nuclear facilities in Iran. Iranian officials say their enrichment capability and missile capacity remains intact. Some in the Trump administration had wanted Iran to reduce its enriched uranium in another country, not inside Iran, as the Iranian negotiators agreed to do. Trump has threatened actions to take over the stockpile but none have been taken. How much leverage each side has in the post signatures negotiations will depend on which version of reality prevails. Republican Senator Lindsey Graham hailed the deal, but made it clear that any final nuclear deal would be taken to Congress for a review and vote, which means the MOU is not a final agreement and instead is a 60-day grace period.

This is where the most serious question about the deal lies and it should not be sugarcoated to say that what was announced Sunday is a ceasefire framework that has been presented in the language of a diplomatic settlement. It helps to end the violence and open the Strait, which is very significant for the global markets, for civilian lives and for the developing world soaking up the supply shock. But the conditions that prompted the United States and Israel to launch the war in February Iran's progress in uranium enrichment, its ballistic missile program and its network of armed regional proxies have not been addressed. They are dangling, as negotiations between parties are already publicly underway regarding the financial terms of the agreement they just announced; those negotiations last only two months.

This would “fundamentally transform the Middle East for the next 50 years,” said JD Vance. If Iran "finishes the nuclear deal" and that is the key word Trump will keep "the military option" or turn the United States into "the guardian of the Middle East," and in return, it will have 20 percent of the region's revenues, he told the New York Times. Tehran's military is publicly claiming victory. The hardliners in Mashhad are observing the next 60 days. The previous time the world believed it had resolved Iran's nuclear problem was in 2015, when after years of multilateral talks, the world made a three-year deal with Tehran, which was then ripped up by Trump. In reaction, Iran has stepped up its enrichment efforts to results far higher than those allowed by the initial agreement. That history is what has resulted in the stockpile that no one wants to know what to do with today.

Fifty years of transformation is a long wager on a pact whose actual wording hasn't been published, whose opening terms are already a source of controversy and whose 60-day countdown begins Friday.