U.S. and Iran Move Closer to Signing Interim Strait of Hormuz Deal Ahead of G7 Summit

The United States and Iran are inching toward a tentative agreement to reopen the Strait of Hormuz, a critical global shipping chokepoint, potentially during the June 15–17 G7 summit in Evian, France. Geneva, Switzerland, is also being considered as a signing location as early as June 16, according to diplomats and officials briefed on the negotiations. The interim deal aims to extend a ceasefire by roughly two months while advancing stalled nuclear talks, with the U.S. lifting its blockade of Iranian ports and Iran reopening the strait to commercial shipping. The Strait of Hormuz normally handles about one-fifth of global oil and liquefied natural gas (LNG) flows, and its closure has disrupted energy markets, pushing prices higher and fueling inflation. Oil prices dropped sharply on June 11 after President Donald Trump canceled imminent airstrikes on Iran and suggested a deal was imminent, with Brent crude falling 3.2% to below $88 per barrel on June 12. The agreement still requires approval from Iran’s Supreme Leader Mojtaba Khamenei, who has been in hiding since the conflict escalated in late February. A European official noted that communicating with Khamenei can take days, though Iranian foreign ministry spokesman Nasser Kanani stated on June 12 that “we have not yet reached a conclusion” on any deal. Meanwhile, the Islamic Republic News Agency reported that a draft memorandum of understanding (MOU) is “nearly finalized” and awaiting a decision from Iran’s leadership. The MOU reportedly includes the release of $24 billion in Iranian funds held in foreign banks, a move Trump has previously resisted. It also calls for the U.S. to withdraw forces from areas near Iran, lift oil sanctions, and commit to a $300 billion reconstruction plan for the Islamic Republic, which Iran claims suffered that level of damage during the war. However, Israel—excluded from the negotiations—has signaled resistance to any deal that includes a ceasefire in Lebanon, where it is engaged in conflict with Iran-backed Hezbollah militants. Tensions between Israel and Iran escalated further on June 7 and 8 with reciprocal missile strikes, prompting Trump to urge Netanyahu to de-escalate. The U.S. and Iran have exchanged fire in recent days, including a June 9 U.S. strike on Iranian military sites following the downing of an Apache helicopter, and Iranian attacks on U.S. forces in Jordan, Kuwait, and Bahrain. The proposed MOU would aim to restore normal shipping levels within about a month of signing, though diplomats acknowledge complications such as potential Iranian mine placements in the strait, which the U.K. and France are preparing to help clear. Before the conflict, roughly 140 ships passed through the strait daily, but traffic has remained far below pre-war levels despite recent increases. The text of the MOU has not been made public. Trump has indicated that Vice President JD Vance and special envoy Steve Witkoff will represent the U.S. at any signing. The interim deal represents a fragile step toward ending a conflict that has killed thousands, destabilized the Middle East, and roiled global energy markets since late February.