The United States and Iran have signed an initial peace agreement designed to bring an end to the conflict that has shaken global energy markets and heightened tensions across the Middle East.
The memorandum of understanding, signed by U.S. President Donald Trump and Iranian President Masoud Pezeshkian during the G7 summit in France, takes immediate effect and establishes a framework for negotiating a comprehensive peace deal within 60 days, with the possibility of an extension if both sides agree.
Under the agreement, military operations between the two countries will cease immediately, marking the first major step toward ending a war that began on February 28 and has had far-reaching economic and geopolitical consequences.
One of the most significant provisions involves the reopening of the Strait of Hormuz, a critical global shipping route through which roughly one-fifth of the world’s oil and liquefied natural gas supplies pass. The agreement guarantees free passage through the waterway for 60 days, helping ease concerns over global energy disruptions and inflationary pressures.
The deal also outlines a proposed $300 billion reconstruction framework intended to support Iran’s economic recovery. However, U.S. officials stressed that Washington is not directly providing funds to Tehran, arguing that the initiative would instead facilitate international investment and development projects if Iran complies with the terms of the agreement.
A key element of the memorandum addresses Iran’s nuclear program. Tehran reaffirmed that it will not develop or acquire nuclear weapons, while agreeing to dilute its enriched uranium under the supervision of the International Atomic Energy Agency (IAEA). Negotiations over a final nuclear settlement will continue during the 60-day period.
Speaking at the G7 summit in Evian-les-Bains, France, Trump defended the agreement as a necessary step to prevent a broader economic crisis.
“I didn’t want to see economic catastrophe,” Trump said, warning that continued conflict could have triggered severe consequences for global markets and energy supplies.
Despite endorsing the agreement, Trump also cautioned that military action remains an option if negotiations fail to produce a final deal, stating that the United States would respond forcefully if Iran abandoned the peace process.
Iranian officials welcomed the agreement but expressed caution about Washington’s intentions. Parliamentary Speaker Mohammad Bagher Ghalibaf said Iran remained skeptical of the United States and would remain prepared to defend its interests if negotiations break down.
The agreement has already affected global markets, with oil prices falling following the announcement, although energy costs remain higher than they were before the conflict began.
The deal has sparked intense political debate in Washington. Some Republican lawmakers criticized the reconstruction framework and questioned whether the agreement provides too many concessions to Tehran. Democratic critics argued that the memorandum fails to adequately address Iran’s missile program and support for regional proxy groups.
Meanwhile, uncertainty remains regarding the broader regional implications of the deal. Although the agreement calls for an end to military operations on all fronts, including Lebanon, Israel has indicated that it does not currently plan to withdraw forces from the region and has continued operations against Hezbollah.
The coming weeks will be critical as negotiators work toward a permanent settlement. While the memorandum represents a significant breakthrough after months of conflict, major issues surrounding Iran’s nuclear activities, regional influence, and long-term security arrangements remain unresolved.
