US and Iran agree on framework to end conflict and reopen Strait of Hormuz

US and Iranian officials have agreed on a framework to end their military conflict, lift the US naval blockade on Iranian ports, and reopen the Strait of Hormuz to toll-free shipping. The memorandum of understanding, announced on June 14, 2026, is expected to be formally signed around June 19 in Switzerland.

Roughly 20% of the world’s oil transits through the Strait of Hormuz. When that chokepoint gets restricted, every market on earth feels it.

What the deal actually includes

The framework covers four main pillars: a 60-day extension of the ceasefire, an end to the US naval blockade, toll-free passage through the Strait of Hormuz, and a cessation of violence in Lebanon. In exchange, the 60-day window opens a dedicated negotiation period focused on Iran’s nuclear program.

President Trump confirmed the reopening of the Strait and referenced measures for the destruction of Iran’s highly enriched uranium, though the full text of the agreement has not been publicly released. The deal is anticipated to restore full prewar shipping conditions within approximately 30 days after the formal signing.

The talks represent the highest level of direct communication between Washington and Tehran since 1979. Mediators played a critical role. Pakistani Prime Minister Shehbaz Sharif and Qatari negotiators facilitated the discussions.

How the conflict escalated

The current crisis traces back to US and Israeli strikes on Iran that began around February 28, 2026. Iran responded by imposing restrictions on the Strait of Hormuz. A brief ceasefire in early April 2026 offered a temporary reprieve but failed to hold. The US subsequently imposed a naval blockade on Iranian ports, further escalating tensions.

What this means for investors

Oil prices dropped on the news as traders priced in the prospect of resumed shipping through the Strait. Broader equity markets showed positive momentum, reflecting optimism about reduced geopolitical risk.

The 60-day negotiation window on Iran’s nuclear program is where things could get complicated again. The framework defers the hardest question, Iran’s nuclear ambitions, to a future round of talks.

The 30-day timeline for restoring full prewar shipping conditions gives markets a concrete benchmark to watch. If tanker traffic through the Strait normalizes on schedule, expect energy prices to continue unwinding their risk premium.

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