The United States and Iran reached a memorandum of understanding on June 14, 2026, to end hostilities and reopen the Strait of Hormuz [1, 2].
The agreement aims to stabilize global energy markets by restoring the free flow of oil through one of the world's most strategic waterways. Following the announcement, oil prices slipped by $4 [1].
Prime Minister Shehbaz Sharif of Pakistan acted as the mediator for the negotiations. The formal document signing took place Friday in Switzerland [1, 2].
Under the terms of the deal, the U.S. naval blockade of Iranian ports will end. Donald Trump said the Strait of Hormuz would be open "toll free" [1]. This move follows a conflict between the two nations that lasted three and a half months [3].
An Iranian official said safe transit through the Strait of Hormuz will be ensured [4]. The agreement marks a sudden shift in regional dynamics after months of military tension and economic disruption.
Shehbaz Sharif said a document signing would take place Friday [2]. The deal focuses on the immediate cessation of war, and the removal of barriers to international maritime trade in the region.
“The Strait of Hormuz would be open "toll free" and the U.S. naval blockade of Iranian ports would also end.”
The reopening of the Strait of Hormuz removes a critical bottleneck for global oil supplies, likely reducing volatility in energy pricing. By utilizing Pakistan as a mediator and Switzerland as neutral ground, the U.S. and Iran have established a diplomatic channel to resolve a short but intense military conflict that threatened global economic stability.
