Markets reacted positively to a preliminary agreement between the U.S. and Iran aimed at ending hostilities that have contributed to a global economic downturn over the past four months. Stocks increased, while oil prices and bond yields decreased following the announcement.
As of now, no formal deal has been signed, but both parties have agreed to a "memorandum of understanding" and have paused military actions. U.S. President Donald Trump stated that the Strait of Hormuz will be reopened as part of this agreement.
Iran's Deputy Foreign Minister Kazem Gharibabadi indicated that the text of the agreement has been finalized and is set to be signed on Friday in Geneva, Switzerland. He stated, "A permanent and immediate end to the war has been declared on all fronts." Trump confirmed that the U.S. naval blockade of Iran would be lifted.
Details of the memorandum have not yet been made public, and information is based on statements from those involved in the negotiations. Both Trump and Gharibabadi have mentioned that the Strait of Hormuz will reopen after the signing on Friday, although Iranian state media reported that this reopening would depend on "Iranian arrangements."
Qatar expressed support for the agreement, highlighting its importance for ensuring freedom of navigation in the Strait of Hormuz. The ceasefire established by the agreement is set to last for 60 days, allowing for future discussions regarding Iran's nuclear program, sanctions, and regional security.
Gharibabadi noted that negotiations regarding nuclear issues would only commence if the U.S. releases billions of dollars in frozen Iranian assets, a claim that the U.S. has rejected. Trump reiterated his stance that Iran should not acquire nuclear weapons and indicated that military action against Iran could be an option if negotiations fail.
The agreement does not include Israel, which has been involved in the conflict since its onset. Israeli Defense Minister Israel Katz stated that Israel would maintain its military presence in Lebanon, Gaza, and Syria and would respond to any Iranian attacks.
The attendance of key Iranian officials at the signing could indicate the level of support for the deal within Iran's political landscape. Abbas Araghchi, Iran's foreign minister, played a significant role in the negotiations, while the presence of other senior officials could signal backing from various factions within Iran.
No official U.S. delegation has been confirmed for the signing. Vice President JD Vance has been mentioned as a potential attendee, and Trump may attend directly from the G7 summit in France. The involvement of Saudi Arabia and the UAE in the negotiations could also signal broader regional support for the agreement.
This conflict has involved multiple parties beyond just the U.S. and Iran, and the outcome of the negotiations could have significant implications for regional stability.