The United States and Iran have signed an agreement aimed at ending the Middle East conflict, with a formal ceremony scheduled for Friday in Switzerland to launch a 60-day negotiation period.
The memorandum of understanding is intended to bring an end to months of hostilities triggered by US-Israeli strikes on Iran in February, which caused widespread disruption across the region and unsettled the global economy.
Oil prices fall
Oil prices declined by more than two percent on Thursday, extending earlier losses following news of the agreement over the weekend.
Brent North Sea crude, the international benchmark, fell by 2.1 percent to $77.87 per barrel as of 0525 GMT.
Confirmation of signing
US President Donald Trump signed the memorandum on Wednesday after attending the G7 summit in France, during a candlelit dinner at the Palace of Versailles, according to a video shared by a presidential aide.
Iranian foreign ministry spokesperson Esmaeil Baqaei, quoted by the state news agency IRNA, said the document “was finalised with the signatures of the presidents”.
Iran’s chief negotiator and parliamentary speaker, Mohammad Bagher Ghalibaf, described the agreement as a US “failure”.
Immediate implementation
Pakistan’s Prime Minister Shehbaz Sharif said the memorandum “shall enter into force with immediate effect and as a first step, Islamic Republic of Iran will instantly reopen the Strait of Hormuz and the United States of America will immediately lift the naval blockade”.
He also said Pakistan, with Qatari backing, would host a ceremony in Switzerland on Friday to “commemorate this landmark event and commence with the technical level talks”.
Iran outlines further plans
Tehran has reiterated plans to impose charges on vessels passing through the Strait of Hormuz after the 60-day period outlined in the agreement.
Ghalibaf said in a televised interview that the “Strait of Hormuz will not return to pre-war conditions”, adding: “Iran has the right to sovereignty over the Strait of Hormuz and of course we will receive a fee for services.”
Key terms of the agreement
The document states that Tehran has agreed to reduce its enriched uranium stockpile under United Nations supervision, which a US official described as a “major, major win”.
Iran has maintained that nuclear issues will only be addressed in later discussions following the initial agreement.
The deal also allows Iran to resume oil exports, while sanctions are expected to be lifted if a final agreement is reached after the 60-day negotiation period.
Iran could additionally gain access to a $300 billion reconstruction fund, although officials said the United States is under no obligation to contribute.
Trump issues warning
Trump warned that military action could resume if Iran fails to comply with its commitments.
“If they don’t behave, we’ll go right back to dropping bombs right smack in the middle of their head,” he said at the G7 summit.
Regional tensions continue
The Israeli military said one of its soldiers was killed during fighting in southern Lebanon, an incident that also left seven others injured.
The US-Iran agreement is expected to halt hostilities across multiple fronts, including Lebanon.
However, Israeli Prime Minister Benjamin Netanyahu has insisted that Israeli forces will remain in Lebanon, where operations against Hezbollah continue.
Hezbollah leader Naim Qassem described the agreement as a “great victory” and urged Lebanon to take advantage of the situation to push out Israeli forces.