Investors reposition after signals of easing regional disruption
The United States and Iran have reached a tentative peace agreement aimed at ending months of conflict across the Middle East, with an initial signing expected in Switzerland, though key provisions remain unsettled and regional reactions remain divided.
The agreement was first announced by Pakistani prime minister Shehbaz Sharif, who has acted as a mediator throughout the negotiations. Sharif said the two sides were “closer to a peace deal than ever before,” with finalization expected within 24 hours and preparations underway for an electronic signing process.
US president Donald Trump confirmed the agreement in public remarks, describing it as a “great settlement of the war with Iran,” though he emphasized that it remained subject to the “finalization of documents.” Iranian officials also signaled cautious acceptance, with Foreign Ministry spokesperson Esmaeil Baghaei noting that timing remained uncertain and that “hesitation of the other side” could still delay implementation.
Reopening of the Strait of Hormuz
A central element of the draft deal is the planned reopening of the Strait of Hormuz, a critical global shipping route that carries roughly one-fifth of the world’s crude oil supply. European leaders have strongly supported restoring maritime access. German foreign minister Johann Wadephul said the strait “must be made navigable again without any restrictions whatsoever,” while European Commission president Ursula von der Leyen called for “immediate reopening” and “freedom of navigation.”
The agreement reportedly includes a memorandum of understanding outlining steps to reduce tensions, restore shipping lanes, and begin phased discussions on Iran’s nuclear program. According to US officials, the draft also contemplates lifting certain sanctions and unfreezing Iranian assets, potentially including up to $12 billion, although exact figures remain disputed between media outlets and negotiators.
Nuclear program terms remain unresolved
Despite progress, major uncertainties persist. The structure of Iran’s nuclear program remains unresolved, with European and US officials reiterating that Tehran “must never acquire a nuclear weapon.” French president Emmanuel Macron said the agreement would be reviewed at the G7 summit, focusing on “the long-term reopening of the Strait of Hormuz” and Iran’s nuclear and ballistic programs.
Regional security dynamics continue to complicate implementation. Israel, which was not a party to the negotiations, has expressed opposition. Israeli Defense Minister Israel Katz was quoted as saying the Israel Defense Forces would remain in parts of Lebanon, Syria and Gaza “indefinitely,” while far-right minister Itamar Ben Gvir rejected the agreement outright, saying, “Trump’s agreement does not bind us.”
The deal has also drawn mixed international reactions. Qatar and Turkey welcomed the agreement as a step toward stability, while European Union officials described it as a “potential breakthrough.” However, analysts cited by international media warned that unresolved issues — including Iran’s nuclear ambitions, regional proxy conflicts, and Lebanon’s ongoing security crisis — could threaten long-term durability.
Global markets react
Markets responded sharply to the announcement, with oil prices falling and global equities rising on expectations that the Strait of Hormuz may reopen, easing supply disruptions. The price of Brent crude dropped below $84 a barrel as trading opened across Asia-Pacific financial centers.
