US, Iran reach ceasefire deal to reopen Strait of Hormuz

The United States and Iran reached a deal yesterday that President Trump said would reopen the Strait of Hormuz and end the US’ blockade of Iranian ports. That’s welcome news for the global economy, which has been experiencing higher inflation since the war began on February 28.

Prime Minister Shehbaz Sharif of Pakistan, a critical negotiator, announced the news on X around 5:30pm ET yesterday: “Both sides have declared the immediate and permanent termination of military operations on all fronts, including in Lebanon.”

Both President Trump and Iran’s National Security Council confirmed the deal’s existence, with Trump saying on Truth Social that it includes “the toll free opening of the Strait of Hormuz” and “the immediate removal” of the US blockade. Iranian officials told the New York Times that Iran had held off on finalizing the agreement until after midnight local time so it wouldn’t be reached on President Trump’s birthday.

So…is the war over? The full text of the agreement was not released, but the deal appears to be a 60-day extension of the existing ceasefire, as it does not address Iran’s nuclear program nor the US’ economic sanctions on Iran.

In a phone call to the New York Times yesterday, Trump said that if Iran did not reach a satisfactory nuclear agreement with the US during the 60-day window, the US might become “the guardian of the Middle East” in return for 20% of revenue from the region.

What happens next? An official signing ceremony will take place on Friday in Geneva. In a follow-up post to Truth Social, President Trump wrote, “With the opening of the Strait upon the signing of the Deal on Friday, for purposes of mine removal, oil will flow on both ends again for the Region, and the World!”

Zoom out: Shipping in the critical waterway may not resume until the end of the week. In the meantime, oil prices plunged last night.—HVL