US and Iran inch closer to signing deal to reopen Strait of Hormuz

The US and Iran may sign an agreement to reopen the Strait of Hormuz on the sidelines of the Group of Seven world leaders summit next week, according to senior officials. A senior Iranian official indicated overnight that a deal is likely, said a G7 official and a diplomat from outside the group, who both asked not to be named discussing sensitive matters. This year’s G7 summit takes place in Evian, in the French Alps, from June 15 to June 17. Geneva, in Switzerland, is nearby and being floated as a potential location for the signing as soon as Sunday, according to people familiar with the plans. The G7 is a bloc consisting of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States. The EU is also represented within the G7. US President Donald Trump indicated that his vice-president, J.D. Vance, and Steve Witkoff, a special envoy, would represent him at any signing. The interim peace deal would see the US and Iran extend their ceasefire by around two months and go into further negotiations over the Islamic Republic’s nuclear programme. As well as Iran reopening the strait, the US would lift its blockade of Iranian ports. The development would go a long way towards ending a war that has caused chaos across the Middle East since late February, killing thousands of people and causing energy prices to soar. The fighting has also pushed up inflation globally, hurting Trump ahead of US midterm election in November. But on Friday, Trump said Tehran’s description of the proposed agreement “bears no relation to the truth”, labelling the Iranians “very dishonourable people to deal with”. The terms of the so-called memorandum of understanding 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 erupted with US-Israeli strikes on Iran and the main mediators – Qatar and Pakistan – have found communicating with him can take days. An Iranian foreign ministry spokesman on Friday said “we have not yet reached a conclusion” on any deal with the US. Still, he signalled there had been progress in recent days. The IRNA state-run news agency reported, separately citing a foreign ministry spokesperson as saying a draft is “nearly finalised and awaiting a final decision from Iran’s decision-making bodies”. In Tehran, some ordinary Iranians feared a deal with the US would entrench the authorities’ rule. “I am not sure how I feel,” a 29-year-old who works at a cafe in the Iranian capital said on condition of anonymity for fear of retribution. “I don’t know if it will be good or bad for us. The main purpose of this war was for the US to remove the system and this did not happen. So what does a deal do?” Oil prices fell and equities jumped late on Thursday when Trump said he had cancelled imminent air strikes on Iran and claimed that an accord was all but done. Energy dropped further on Friday, with Brent down 3.2 per cent to below US$88 a barrel. While the global benchmark is still up almost 45 per cent this year, it has fallen from a high of US$125 in late April, in part because traders have anticipated a deal instead of a resumption of all-out warfare. Trump said commercial vessels would have free passage through the strait, which normally handles one fifth of the world’s oil and liquefied natural gas supplies. IRNA added that Iran would insist on managing traffic through the strait. One diplomat familiar with the negotiations said the US and its allies would aim to ensure usual levels of shipments through the waterway within about a month of a deal being signed. That may be complicated by the high likelihood of Iran having placed mines in the strait, which the UK and France are preparing to help clear. Roughly 140 ships passed through the narrow chokepoint each day before the conflict erupted. Iran then all but closed it by firing on ships with drones and missiles. The number of vessels has crept up in recent weeks, but is still far below pre-conflict levels. The text of the MOU has not been made public yet. Mehr, an Iranian news agency, reported it would include the release of US$24 billion of Iranian funds held in foreign banks. Trump has previously balked at the idea of unfreezing Tehran’s funds. Mehr also said the agreement states the US will withdraw forces from areas near Iran, lift oil sanctions and “present reconstruction plans” for the Islamic Republic worth around US$300 billion. Iran’s government has said it suffered around that level of damage during the war because of the intense US and Israeli bombardment, which also killed many leaders. Another potential sticking point is Israel, which is not part of the negotiations for the interim deal. The mainly Jewish state has resisted any MOU that includes a ceasefire in Lebanon, where it is fighting Iran-backed Hezbollah militants. Israel is wary of any deal with Iran and Prime Minister Benjamin Netanyahu has signalled he would prefer more strikes to further degrade the country’s military. Last week, Trump swore at Netanyahu during a call in which he urged the Israeli leader to ease military operations in Lebanon. Iran and Israel fired missiles on one another on Sunday and Monday, forcing Trump to call for them to end their strikes. Tensions between the US and Iran also intensified this week, bringing their ceasefire from April 8 close to collapse. The US blamed Iran for downing an Apache attack helicopter and retaliated by firing on Iranian military sites on Tuesday night. Iran responded by targeting US forces and bases in Jordan, Kuwait and Bahrain. There were more exchanges of fire on Wednesday. Trump then said he would hit Iran “VERY HARD” on Thursday night before changing plans and announcing a deal was close. That came after Iran privately threatened to end negotiations and escalate its attacks in response to any further US strikes, one of the diplomats said. Additional reporting by Agence France-Presse

US and Iran inch closer to signing deal to reopen Strait of Hormuz

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}The pact, likely to be signed during next week’s G7 summit, would also see both sides extend their truce by around two months

The pact, likely to be signed during next week’s G7 summit, would also see both sides extend their truce by around two months