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President Donald Trump has signed a memorandum of understanding with Iran that formally ends active military operations between the two countries. The one-page document, known as the “Islamabad Memorandum,” was electronically signed in mid-June 2026 and sets the stage for follow-on negotiations covering Iran’s nuclear program, sanctions relief, and the reopening of the Strait of Hormuz.
A White House official confirmed the signing. The deal was brokered with involvement from US envoys Steve Witkoff and Jared Kushner, with Pakistan serving as a mediator.
What’s in the deal
The memorandum contains 14 points, the most consequential being an immediate cessation of military hostilities. The agreement establishes a structured 60-day negotiation window to tackle Iran’s nuclear activities, the future of sanctions, and the status of the Strait of Hormuz.
Roughly 20% of the world’s oil and gas supply flows through the Strait. Its closure during the conflict created chaos in energy markets, sending prices surging and dragging down global economic forecasts. The MOU commits to reopening the waterway as part of the broader agreement.
Trump has indicated he’s willing to submit the memorandum to Congress for review, while reserving the right to resume military action if Iran violates the terms.
How the conflict escalated
The signing follows months of escalating military confrontation between Washington and Tehran. Iran’s decision to effectively close the Strait of Hormuz turned a regional standoff into a global economic crisis. Energy prices spiked as traders priced in the disruption, and international organizations began revising their global growth forecasts downward.
The involvement of Jared Kushner, Trump’s son-in-law who previously led Abraham Accords negotiations during Trump’s first term, signals the administration’s approach of relying on trusted inner-circle figures for high-stakes diplomacy rather than traditional State Department channels.
A formal signing ceremony is reportedly being discussed. For now, the electronic signing carries legal weight, and the ceasefire is in effect.
What this means for markets and investors
WTI crude oil prices have already begun declining in response to the prospect of the Strait of Hormuz reopening. On the crypto side, Bitcoin surged to a three-month high exceeding $82,000 in May 2026, when early reports of diplomatic progress first surfaced.
The 60-day negotiation window creates a specific timeline that traders should watch carefully. Trump explicitly left the door open to resuming military action if Iran doesn’t hold up its end, meaning any breakdown in negotiations, any intelligence leak about Iranian nuclear activity, or any incident in the Strait could snap markets back in the other direction.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
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