US-Iran Peace Deal Nears as Strait of Hormuz Reopening Raises Hopes of Ending Gulf Conflict
A potentially historic diplomatic breakthrough appears to be taking shape between the United States and Iran, with both sides reportedly moving closer to signing a memorandum of understanding that could ease tensions across the Gulf region and restore shipping through the strategically vital Strait of Hormuz.
According to sources familiar with the ongoing negotiations, the agreement could be signed as early as Sunday, most likely in Geneva.
However, officials involved in the discussions have stressed that negotiations are still underway and that the final language of the document has yet to be approved.
While progress has been substantial, no formal agreement has been concluded so far.
Iran Insists on Wider Regional Ceasefire
Sources close to the talks revealed that Tehran has maintained a firm position throughout the negotiations.
Iranian officials have reportedly insisted that any arrangement with Washington must go beyond bilateral issues and include an end to hostilities in Lebanon, where Israel has been engaged in a prolonged confrontation with the Iran-backed Hezbollah movement.
Iran views a broader regional ceasefire as an essential component of any lasting settlement and has continued to push for this demand during the final stages of the discussions.
Agreement Could Be Signed This Weekend
The proposed memorandum is expected to be endorsed by US Vice President JD Vance and Iranian Parliament Speaker Mohammed Baqer Qalibaf.
Diplomatic sources say negotiators are working intensively to finalize the remaining details so that the agreement can be formally signed over the weekend.
The development marks a dramatic shift from the rhetoric seen only days earlier. On Thursday evening, US President Donald Trump had warned of possible additional military action against Iran.
Yet within hours, he signalled a complete change in tone, telling reporters at the White House that a settlement was now within reach.
Trump described the negotiations as a major success and indicated that the reopening of the Strait of Hormuz would follow immediately after the signing of the agreement.
He suggested that the breakthrough could occur very soon and potentially be completed during meetings in Europe over the weekend.
Major Gains for Tehran
Details emerging from Iranian officials suggest that the proposed arrangement would provide significant benefits to Tehran.
A senior Iranian source indicated that the draft framework includes the removal of restrictions on Iranian oil exports, the release of billions of dollars in frozen Iranian assets, and the implementation of a ceasefire across all active fronts, including Lebanon.
Notably, the source did not specify any major commitments Iran would be required to make in exchange.
Iranian media outlets have reported additional provisions that would require the United States to reduce its military presence around Iran and support long-term economic recovery efforts.
Reports also suggested that reconstruction assistance worth hundreds of billions of dollars could form part of future discussions aimed at rebuilding sectors of Iran’s economy affected by years of sanctions and conflict.
Perhaps most significantly, the contentious nuclear issue appears to have been deferred for future negotiations.
For years, Washington has sought assurances that Iran will never develop nuclear weapons, while Tehran has consistently maintained that its nuclear programme serves peaceful purposes.
Questions Over Washington’s Gains
While the reported terms appear favourable to Iran, observers remain uncertain about what tangible benefits the United States has secured beyond the reopening of the Strait of Hormuz.
The lifting of sanctions, release of frozen funds and restrictions on military operations in Lebanon have long been among Tehran’s principal demands.
As of Friday, American officials had not publicly outlined any major concessions obtained from Iran in return.
Throughout the conflict, which began with US and Israeli military strikes against Iran on February 28, Trump repeatedly expressed confidence that a diplomatic resolution was close.
Several earlier rounds of negotiations, however, failed to produce a breakthrough.
Nevertheless, financial markets interpreted the latest developments as a strong signal that the region may be moving away from a dangerous escalation.
Global Markets Welcome Signs of Peace
Investors responded positively to reports of progress in the negotiations. International stock markets advanced while crude oil prices declined as concerns over energy supply disruptions eased.
Brent crude dropped by more than two percent during European trading on Friday.
The decline reflected growing optimism that commercial traffic through the Strait of Hormuz could soon resume without interruption.
The waterway remains one of the world’s most important energy corridors, carrying a substantial portion of globally traded crude oil.
Any disruption there has immediate implications for international energy markets and fuel prices.
The recent military exchanges had heightened fears of a wider regional conflict. Iran and Israel resumed direct attacks despite an earlier ceasefire, while the United States and Iran exchanged military strikes over several days.
The prospect of a diplomatic settlement has therefore been viewed as a significant step toward stability.
Security Concerns Persist
Despite encouraging diplomatic developments, tensions on the ground remain far from resolved.
A US official confirmed that American forces intercepted and destroyed two Iranian attack drones after an attempted strike targeting commercial vessels navigating through the Strait of Hormuz.
At the same time, Iranian forces reportedly halted a tanker attempting to transit the strategic waterway.
Iranian state media also reported explosions near the area during the early hours of Friday, underscoring the fragile security environment despite ongoing peace efforts.
Iranian Foreign Ministry spokesperson Esmaeil Baghaei acknowledged that substantial portions of the agreement had already been settled.
However, he emphasized that Tehran would not compromise on what it considers its fundamental national interests, indicating that key points remain non-negotiable.
Domestic Political Pressure Mounts for Trump
The conflict has also become an increasingly sensitive issue inside the United States.
Recent opinion polls suggest that President Trump’s approval ratings have come under pressure, with many voters expressing concern over rising fuel costs linked to instability in the Gulf region.
Some Republican lawmakers have reportedly warned that public dissatisfaction with the conflict could negatively affect the party’s prospects in the upcoming congressional midterm elections.
Those concerns have added urgency to efforts aimed at securing a diplomatic resolution.
Israel’s Position Remains Uncertain
One of the most complex challenges surrounding the proposed agreement involves Israel’s role.
Iran’s demand for a ceasefire in Lebanon directly affects Israeli military operations against Hezbollah, making the issue particularly sensitive.
Although Israel participated alongside the United States in military action against Iran earlier this year, it has not been directly involved in the current peace negotiations.
Prime Minister Benjamin Netanyahu’s office reiterated on Friday that Israel is not a participant in any memorandum of understanding being discussed between Washington and Tehran.
That position raises important questions about the durability of any ceasefire arrangement involving Lebanon.
Analysts note that without Israel’s formal participation, it remains uncertain whether commitments negotiated between the United States and Iran alone can ensure lasting peace on the ground.
As negotiators race to finalize the agreement, attention is now focused on Geneva, where a deal that could reshape regional dynamics may soon be signed.
Whether the emerging framework delivers long-term stability or merely a temporary pause in hostilities remains to be seen.
