US and Iran agree to halt war and reopen Hormuz, oil prices fall

Lebanon has borne the brunt of the war’s spillover, with more than 1.2 million people displaced by Israel’s offensive against Hezbollah.

The United States and Iran announced on Sunday that they had reached terms to end their war and reopen the Strait of Hormuz, a breakthrough that immediately eased global markets. The agreement, however, remains a framework deal and hinges on a full ceasefire in Lebanon, while deferring talks on Tehran’s nuclear program.

President Donald Trump declared on his Truth Social account, “The deal with the Islamic Republic of Iran is now complete,” shortly after Pakistani Prime Minister Shehbaz Sharif confirmed the pact. The memorandum of understanding is scheduled to be signed officially on Friday in Switzerland.

Sharif said the agreement calls for “the immediate and permanent termination of military operations on all fronts, including in Lebanon.” The announcement comes after months of negotiations that followed joint US and Israeli strikes on Iran in February, which triggered a conflict that killed thousands and disrupted energy markets.

Lebanon remains a sticking point

Lebanon has borne the brunt of the war’s spillover, with more than 1.2 million people displaced by Israel’s offensive against Hezbollah. Iran insisted that a full ceasefire in Lebanon be part of the deal. The Supreme National Security Council in Tehran said hostilities would end permanently starting Monday night.

Iran’s Foreign Minister Abbas Araghchi demanded a complete halt to Israeli attacks on Lebanon, stressing that the US is responsible for implementing the framework. Security sources told Reuters that Hezbollah last fired at Israel before midnight Sunday and has not launched operations since. Israeli strikes have also slowed significantly.

Trump has repeatedly said peace must extend to Lebanon, calling for an end to Israeli and Hezbollah attacks. Israeli Prime Minister Benjamin Netanyahu has not yet commented, but Defense Minister Israel Katz said Israel would resist any pressure to withdraw forces from southern Lebanon.

Strait of Hormuz to reopen

Trump announced that the Strait of Hormuz, a vital artery for global oil and gas shipments, would reopen on Friday. He also ordered the end of the US blockade of Iranian ports. “Ships of the world, start your engines. Let the oil flow!” he wrote.

Oil prices fell sharply on the news, with Brent crude futures dropping about five percent on Monday. Stock markets rallied, though shipping companies warned that clearing mines from the waterway could take weeks.

Political and nuclear dimensions

The war has become a political liability for Trump and Republicans ahead of November’s midterm elections, with voters angered by high gas prices. Within his party, Trump faces pressure to ensure Iran’s nuclear program is dismantled.

During his first term, Trump withdrew from the 2015 nuclear deal negotiated under President Barack Obama. Since then, Iran has enriched uranium to near weapons‑grade levels, producing more than 400 kilograms of material.

Iranian Deputy Foreign Minister Kazem Gharibabadi said a broader agreement would be negotiated during a 60‑day ceasefire, including sanctions relief. Sources told Reuters that nuclear issues would be addressed in later talks.

International reaction

European leaders welcomed the announcement. Britain, Germany, France, and Italy issued a joint statement saying they were prepared to lift sanctions if Iran took “clear, verifiable steps” to limit its nuclear program. China also expressed support.

Before the deal was announced, Iranian officials said the US would release $25 billion in frozen Iranian assets. A US official indicated the agreement would ultimately dismantle Iran’s nuclear program, while Iranian sources said enriched uranium would be diluted domestically rather than destroyed abroad.

The framework deal marks the most significant step yet toward ending the war and stabilizing energy markets, though its durability will depend on whether Israel, Hezbollah, and other regional actors adhere to the ceasefire.