US, Iran move toward interim deal to reopen Hormuz

The US and Iran have moved closer to an interim peace deal aimed at reopening the Strait of Hormuz and helping end a war that has damaged the global economy and created chaos in the Middle East, but uncertainty remains due to conflicting messages from both sides.

President Donald Trump canceled imminent air strikes on Iran on June 11 and said negotiators had made progress. A senior administration official, briefing reporters on June 12, said there was an 80% or 85% chance that an agreement would be signed, adding that some Iranian hard-liners still wanted to block any breakthrough. Those internal disagreements are being worked out, the official said.

“The Islamabad MoU has never been so close,” Iranian Foreign Minister Abbas Araghchi posted on Twitter on June 12. He vowed that “all details will be shared with the public in due course.” Trump reposted Araghchi’s statement.

Pakistan’s Prime Minister Shehbaz Sharif said in a post on Twitter that “the final, agreed text of the peace agreement has been reached” and that his country was working with both sides “to finalize the next steps.”

Yet despite all the progress, there was little clarity about what the text of the so-called memorandum of understanding would contain, with the warring sides giving conflicting accounts. And while the US suggested the deal was essentially done, Iran said it still needed to make a final decision. The disconnect is raising doubts about how quickly Hormuz can return to something close to its pre-war operations.

A person familiar with the deliberations, speaking on condition of anonymity to discuss sensitive matters, said the MOU would be open to interpretation in some areas, including what reopening the strait would mean in practice. While Trump said the ships would get free passage, Iranian media suggested Tehran would still have some degree of control.

Trump will have to strike a delicate political balance: He wants to present the deal as a victory for Iran supporters in his party as well as the American public, which has turned against the war it started with the joint US-Israeli bombing of the Islamic republic in late February.

Vice President J.D. Vance appeared to push back against some of those GOP supporters with a post on June 12 in which he attacked “those who a month ago (correctly) said Donald Trump was a historic president are now criticizing a deal based on unconfirmed media reports.”

“The President is going to get us a good outcome one way or another,” Vance said, vowing that Iran would not get access to blocked funds simply for signing a deal.

I’m seeing a lot of fake information about a possible agreement to reopen the strait and end Iran’s nuclear weapons program. First of all, Iranians are not receiving any cash, and no money is being issued simply for signing an agreement or attending a meeting. This deal is structured… – JD Vance (@JDVance) 12 June 2026

Talk of a deal is focusing more on the G7 summit in Evian in the French Alps on June 15-17. According to senior officials familiar with the matter, an agreement may be signed on the sidelines of that meeting. Geneva is nearby and is being floated as a possible location for the signing by June 14, according to people familiar with the plans.

Trump indicated on June 11 that Vance would represent him at any signing. A senior US official said on 12 June that no decision had been made about the time or location.

Underscoring the still-high tensions between Washington and Tehran, Trump also refuted and expressed his dismay at Iranian media reports, some of which said the US would freeze more than $20 billion of Iranian funds held in other countries.

“The Iranians are a disgrace to deal with,” Trump said in a social media post. “They better get their act together, and fast!”

Iran’s Foreign Ministry said Tehran was still reviewing the draft.

“The relevant authorities should reach consensus on every detail of the text and any possible agreement,” the ministry spokesman said, according to Iran’s IRIB news agency. “Details on how to sign the MoU will be discussed at a later stage.”

A diplomat briefed on negotiations on the MOU said it would allow Iran and perhaps other states near the strait – a key chokepoint for the flow of oil, liquefied natural gas and other commodities – to monitor the security of the waterway to some extent. The senior US official said the US believes Iran’s control over Hormuz has weakened.

Another diplomat familiar with the talks said the US and its allies would aim to ensure normal levels of shipments through the Strait of Hormuz within about a month of the signing of the agreement. This may be complicated by the strong possibility that Iran may have laid mines in the strait, which Britain and France are preparing to help clear.

Before the conflict began, about 140 ships passed through the narrow choke point every day. Iran then almost shut it down by firing at the ships with drones and missiles. The number of ships has increased in recent weeks, but is still well below pre-conflict levels.

Another senior US official said that this is a performance based agreement. According to the official, the key point beyond the reopening of the strait is that Iran would give up or destroy its stockpile of highly enriched uranium, dismantle its nuclear program and not receive any money unless it completes parts of the arrangement.

Under the interim peace deal, the US and Iran will extend their ceasefire for about two months and hold further talks on the Islamic republic’s nuclear program. America will lift its blockade of Iranian ports.

The war has killed thousands of people across the region, primarily in Iran and Lebanon. It has also driven up inflation globally, hurting Trump and his party ahead of the US midterm elections in November.

The terms of the deal still need to be approved by Iran’s supreme leader Mojtaba Khamenei, according to a European official familiar with the matter. He has been in hiding since the conflict began and the main mediators – Qatar and Pakistan – have found that it can take days to communicate with him.

Oil prices fell and equities surged late on June 11 after Trump said he canceled new strikes on Iran.

There was a further decline in energy on 12 June. Brent futures fell as much as 5.1% and were trading at their lowest level since the early days of the war, while European gas fell as much as 8.4%, before paring gains. While the global benchmark is still up nearly 50% this year, it has fallen from a high of $125 in late April.

Iranian news agency Mehr reported that the deal would involve the release of $24 billion of Iranian funds held in foreign banks. Iran supporters like Trump and Senator Lindsey Graham (R-S.C.) have already balked at the idea of ​​freezing any funds for Tehran.

Mehr also said that the agreement states that the US would withdraw troops from areas near Iran, lift the oil embargo and “offer reconstruction plans” worth about $300 billion for the Islamic Republic.

Another potential sticking point is Israel, which is not part of the negotiations for the interim agreement. The Jewish state has opposed any MOU that includes a ceasefire in Lebanon, where it is fighting Iran-backed Hezbollah militants, and is wary of any agreement with Iran. Prime Minister Benjamin Netanyahu has indicated that he would prefer more strikes to further weaken Iran’s military.

The US and Israel initially also wanted to reach a deal with Iran to curb its ballistic missile program and support for Middle Eastern terrorist groups such as Hezbollah and the Houthis in Yemen. It is not clear whether this will be part of the MOU or not.

Israel’s minimum expectation now, according to a person familiar with the matter, is that a ceasefire agreement will ensure that highly enriched uranium is removed from Iran. Israel would consider any deal a failure if Iran gets sanctions relief without giving up its processed uranium, the person said.

Written by Fiona MacDonald, Eric Martin and Salma El Wardani