U.S. and Iran Reach Deal to End War, Impacting Markets and Global Relations

The United States and Iran have reached an agreement to end the ongoing conflict and reopen the Strait of Hormuz. The deal will lift the American naval blockade, with the signing ceremony scheduled for Friday in Switzerland, facilitated by mediator Pakistan.

Markets Respond to the Deal

Global markets reacted positively to the announcement of the tentative deal, with oil prices dropping more than $4 per barrel. Former President Trump expressed optimism by saying, “Ships of the World, start your engines. Let the oil flow!” on Truth Social.

Israel-Lebanon Tensions Remain

Despite the breakthrough, Israel announced that its forces would not withdraw from seized land in Lebanon. Iranian Foreign Minister Abbas Araghchi urged that Israeli attacks must cease, emphasizing U.S. responsibility in the matter. The deal advanced despite criticism from both Trump and Tehran regarding an Israeli strike.

Nuclear Issues Unresolved

The agreement leaves some significant topics, such as Iran’s nuclear program and its stockpile of highly enriched uranium, unresolved. Both sides have 60 days to address these issues as per Iranian state media.

Hezbollah Praises the Deal

Hezbollah, a militant group backed by Iran, welcomed the agreement as a “great achievement.” The group commended Iran for its support and urged Lebanese authorities to build on regional and international backing to strengthen the country’s sovereignty. Hezbollah called on residents returning to southern border areas to remain cautious due to potential Israeli ceasefire violations.

Iran Confirms Deal Signing

Iranian President Mahmoud Pezeshkian confirmed that the memorandum of understanding will be signed on Friday. This follows similar announcements from Pakistan.

Lebanese Army Warns of Risks

The Lebanese army has advised residents returning to border areas to exercise caution due to ongoing ceasefire risks. Iran prioritized ending Israeli attacks on Lebanon during talks, though Israel continues to hold seized territories.

Incident Off Yemen Coast

The UK Maritime Trade Operations reported an attack on a container ship off Yemen by a skiff attempting to board.

Reactions from Egypt and Saudi Arabia

Egypt called the U.S.-Iran agreement a significant development for regional and global stability, hoping it marks a turning point for diplomacy and peace in the Middle East. Saudi Arabia also welcomed the deal, appreciating the efforts of mediators.

Shipping Industry Cautious

Analysts warn that normal shipping operations through the Strait of Hormuz could take months to resume. Maritime Risk & Compliance Manager Dimitris Ampatzidis noted that around 500 vessels are currently in the strait, with only gradual normalization expected.

Trump at G7 Summit

Trump will meet with European allies at the G7 summit, where differences over two wars—one involving Iran—are expected to be key discussion points.

Cautious Optimism in Tehran

In Tehran, residents expressed cautious optimism regarding the initial agreement with the U.S.

Russia’s Perspective

Russia views the progress toward a settlement as significant but warns that peace is still fragile. Both sides, along with mediators, have laid the groundwork for the peace agreement, though U.S.-led negotiations with Russia over Ukraine remain stalled.

Qatari Mediators and Upcoming Preparations

After 17 hours of negotiations in Tehran, Qatari mediators will hold preparatory meetings in Doha ahead of the official signing in Switzerland.

UK Prime Minister’s View

UK Prime Minister Keir Starmer remarked on the significance of the agreement, emphasizing the need to convert it into enduring peace.

Shipping Association’s Caution

The Baltic and International Maritime Council noted that the Strait of Hormuz remains risky for vessels. They expressed concerns over unclear statements and a history of optimistic reassurances.

Chinese Government’s Expectation

China welcomed the agreement and emphasized the importance of restoring stability to the Strait of Hormuz for international navigation.

Netanyahu Seeks Meeting with Trump

Israeli Prime Minister Benjamin Netanyahu aims to meet with Trump to discuss the Iran deal after the G7 summit.

Iran Urges Cessation of Israeli Attacks

Iranian Foreign Minister Abbas Araghchi called for an end to Israeli military actions in Lebanon, commending the support from Turkey, Iraq, and Egypt.

Economic Impact of the Deal

The agreement led to soaring share prices, while oil prices fell significantly. The S&P 500 and Dow Jones Industrial Average indicated probable gains for Wall Street, with positive movements also seen in European markets.