Iran Tensions End as US and Tehran Sign Memorandum Reopening Hormuz Strait
Amid easing Iran tensions, the United States and Iran have released the text of the Islamabad Memorandum of Understanding that ends the war, reopens the Strait of Hormuz, provides for at least $300 billion in reconstruction, and begins lifting sanctions, with a formal signing scheduled for Friday in Switzerland. [1]
Memorandum Ends Military Operations
The 14-point memorandum declares the immediate and permanent termination of military operations on all fronts, including Lebanon. [1] Both sides commit to guaranteeing Lebanon’s sovereignty and territorial integrity. [3] The United States and Iran also agree to mutually respect each other’s sovereignty and to refrain from interfering in each other’s internal affairs. [1] They further undertake not to initiate any war or military operation against each other and to refrain from the threat or use of force. [3] These core commitments form the foundation for halting active conflict across the region. [1]
Reopening the Strait of Hormuz
The United States will begin removing its naval blockade upon signing and fully end it within 30 days. [1] It will also withdraw forces from Iran’s vicinity within 30 days after the final agreement. [3] Iran commits to ensuring safe passage of merchant ships and completing demining of the strait within 30 days. [1] Iran will hold talks with Oman on the future administration of the strait in consultation with other Persian Gulf coastal states. [3] During the initial period after signing, vessel traffic will be restored in proportion to pre-war levels. [3] These measures directly address the closure that followed the conflict involving the United States and Israel. [5]
Economic Relief and Reconstruction Plan
The agreement includes a US and regional partners’ plan for at least $300 billion in Iranian reconstruction. [1] All sanctions, including UN Security Council resolutions, IAEA Board of Governors resolutions, and unilateral US sanctions, will be terminated on an agreed schedule. [3] The US Treasury will issue waivers for Iranian oil exports and associated services such as banking and insurance. [3] Frozen Iranian funds will be made available for use upon implementation of the memorandum. [3] Economic relief will expand in line with Iranian compliance through a mechanism described as a dial by a senior US official. [1]
Nuclear Commitments and Status Quo
On nuclear issues, Iran reaffirms it will not acquire or develop nuclear weapons. [1] Enriched uranium will be addressed via a joint mechanism with in-situ denaturing under IAEA supervision as the minimum approach. [3] The question of enrichment will be discussed as part of the final agreement. [1] Until then, the status quo will be maintained, with Iran keeping its nuclear program in its current state and the United States refraining from new sanctions or additional force deployments. [3]
Path to Final Agreement
An oversight mechanism will monitor implementation of the memorandum. [1] The definitive agreement will be negotiated within a maximum of 60 days, extendable by mutual consent, and ratified by a binding UN Security Council resolution. [3] Missile programs remain excluded from the negotiations. [1] The release of some frozen assets continues to be disputed, and Israel, which is not a party to the pact, does not recognize the agreement. [1]
Practical Challenges for Shipping Resumption
The vital Strait of Hormuz shipping lane is expected to reopen after nearly four months. [5] Once formal approval is given, stranded ships could begin moving through the strait almost immediately, though some may require underwater hull cleaning. [5] About 500 ships and 20,000 seafarers have been stranded in Gulf waters. [5] Operators are expected to proceed cautiously, and insurers may require naval escorts for initial transits. [5] Iran has designated the central area of the strait as a mine danger zone, so ships will initially use coastal traffic zones that are mine-free but not suited for normal volumes. [5] France and Britain have been assembling a coalition to remove mines, with French and German vessels mobilized for that purpose. [5] It could take four to six months before crude export volumes return to pre-war levels. [5] Some buyers have already found alternative suppliers and established new routes. [5] US Vice President JD Vance stated there was an understanding that the strait would reopen in a toll-free way for the long term, while Iran’s foreign ministry indicated the deal would allow maritime service fees rather than tolls. [5]
What to watch next
Negotiations for the definitive agreement will begin immediately after the Friday signing in Switzerland, with an oversight mechanism to track compliance on sanctions relief, reconstruction funding, and nuclear steps. [1] Talks between Iran and Oman on strait administration are also set to start in the coming period. [3]
