US-Iran Interim Accord Takes Effect, Hormuz Prioritised 

An interim agreement between the United States and Iran has taken effect after President Donald Trump signed the document at Versailles, accelerating a previously anticipated Friday signing and shifting the immediate focus to whether Tehran restores commercial traffic through the Strait of Hormuz. 

The accord provides Iran with prompt economic relief while deferring fundamental disputes over its nuclear programme, sanctions and regional activities to negotiations on a final settlement.

A US official said the memorandum of understanding was already in force, although it was not immediately clear whether Iran had begun the work required to fully reopen the waterway.

Trump and Iranian President Masoud Pezeshkian digitally signed English- and Farsi-language versions of the agreement, according to US and Iranian officials, while Iran’s foreign ministry also said the accord had taken effect.

The agreement is intended to halt a conflict that began on February 28 and expanded across the region, disrupting energy supplies and killing more than 7,000 people, mostly in Iran and Lebanon.

Its entry into force came despite criticism from some Republican lawmakers who argued that the terms gave Tehran substantial financial and strategic benefits without first securing its disarmament. Trump, meanwhile, warned that US attacks could resume if Iran failed to comply.

14-Point Plan

The document, titled the “Islamabad Memorandum of Understanding,” sets out 14 points designed to convert an existing, fragile ceasefire into a broader settlement. It declares an immediate halt to military operations involving the US, Iran and their wartime allies on all fronts, specifically including Lebanon, and commits Washington and Tehran to respect each other’s sovereignty and refrain from interference in domestic affairs.

The two sides are to negotiate a final agreement within 60 days, although the deadline can be extended by mutual consent. The wording presents the cessation of hostilities as permanent, but leaves the final settlement to confirm the ceasefire and establish detailed obligations.

The most urgent reciprocal commitments concern maritime access.

Washington is required to begin removing its naval blockade and other impediments affecting Iranian vessels and ports immediately, with the process to be completed within 30 days. Iran, in turn, is to begin arranging safe passage for commercial ships through the Strait of Hormuz and restore traffic toward prewar levels over the same period.

Iran is expected to clear mines and remove other technical and military obstacles before the waterway can return to normal operations.

Commercial vessels are to receive toll-free passage for 60 days between the Persian Gulf and the Gulf of Oman. Longer-term management of the strait remains unresolved, with the memorandum calling for Iran to discuss maritime administration and services with Oman and other Gulf littoral states.

Although the agreement calls for shipping to restart immediately, it allows as long as 30 days for full restoration. That leaves a gap between the political declaration that Hormuz is open and the point at which shipowners, crews and insurers are confident that voyages can resume safely.

Iran Relief

The US is to issue waivers allowing Iran to export crude oil, petroleum products and derivatives while negotiations continue. Those authorisations are also intended to cover banking, insurance, transport and other services needed to conduct the trade.

Washington also undertakes to make frozen or restricted Iranian assets available for use, although the procedures for releasing or transferring the money must still be agreed. The memorandum says the funds should ultimately be usable for payments to beneficiaries designated by Iran’s central bank, with the United States providing the necessary licences.

Those provisions offer Tehran economic benefits before the final nuclear and sanctions settlement is complete. Pending that agreement, Iran is to maintain the current status of its nuclear programme, while Washington will refrain from imposing new sanctions or deploying additional forces to the region.

The document also envisages a schedule for terminating broader US and international sanctions as part of the final settlement.

It calls on Washington to work with regional partners on a reconstruction and economic-development plan worth at least $300 billion, but leaves the financing structure, contributors, and implementation mechanism to be determined during the 60-day negotiations.

Nuclear Stockpile

Iran reiterates that it will not procure or develop nuclear weapons. The two countries are to negotiate a mechanism for dealing with Iran’s stockpile of enriched uranium, with the memorandum providing that, at minimum, the material can be diluted on Iranian territory under International Atomic Energy Agency supervision.

That represents a compromise from earlier US demands that highly enriched material be removed from Iran or destroyed. The interim text does not specify how much material must be diluted, the enrichment level to which it must be reduced or the timetable for completing the process.

Nor does it settle whether Iran will be permitted to continue enriching uranium in the future. Washington has at times sought zero enrichment inside Iran, while Tehran has insisted that it retains a sovereign right to enrich uranium for peaceful purposes. The inspection powers that would be granted to the IAEA also remain to be negotiated.

The memorandum is silent on limits to Iran’s ballistic-missile programme and contains no explicit requirement that Tehran sever its support for Hezbollah or other allied armed groups. Those omissions are central to criticism that Iran is receiving oil, asset and sanctions relief before the principal security concerns cited by Washington at the beginning of the war have been resolved.

Trump also appeared to soften his earlier position on Iran’s missiles, saying after the agreement was announced that it would be unfair to deny Tehran weapons held by other countries. At the same time, he maintained the threat of renewed US military action, underscoring how quickly the accord could unravel if Washington concludes that Iran is not complying.

Shipping Industry

The reopening of Hormuz will be the agreement’s first visible test. The strait normally carries roughly one-fifth of the world’s oil, making its closure a major source of higher energy prices, shipping delays and renewed inflationary pressure.

Oil prices declined as the agreement raised expectations of additional Iranian exports and the restoration of Gulf shipments, but later pared losses after Trump threatened further attacks in the event of a violation. Shipping executives have warned that commercial traffic may take weeks to normalise because companies will require assurances over mines, military activity, insurance coverage and the safety of crews.

The memorandum’s reference to future Iranian consultations over the administration of the strait may also become contentious. US officials have presented the waterway as toll-free, while Tehran has argued that it should retain a management role after the initial 60-day period.

Lebanon Spoiler

The agreement attempts to extend the cessation of hostilities to Lebanon, where Israel has been fighting Iran-backed Hezbollah. It calls for an end to military operations and protection of Lebanon’s sovereignty and territorial integrity.

Israel, however, was not a party to the US-Iran negotiations and has said it retains the right to act against Hezbollah. Israeli strikes and Hezbollah drone attacks were reported after the agreement was reached, demonstrating the difficulty of enforcing a ceasefire on a front involving actors that did not sign the memorandum.

G7 leaders welcomed the US-Iran accord and called for an immediate ceasefire in Lebanon. But renewed escalation there could threaten the wider agreement, particularly because Tehran regards an end to Israeli operations against Hezbollah as part of the bargain.

60-Day Window

The memorandum provides for a joint executive mechanism to monitor implementation. Substantive negotiations on the remaining provisions are to proceed after the parties begin carrying out the initial ceasefire, blockade, maritime, oil-waiver and asset-release measures.

Any final agreement is intended to receive endorsement through a binding United Nations Security Council resolution. Negotiators must still settle the future of enrichment, the treatment of Iran’s uranium inventory, the sanctions timetable, inspection arrangements, reconstruction financing and the long-term security regime surrounding Hormuz.

The first days of implementation are therefore likely to determine whether the memorandum becomes the foundation for a lasting settlement or merely another pause in the conflict. A sustained halt in military operations, visible restoration of shipping and reciprocal economic measures could build momentum for the talks. A dispute over compliance, sequencing or Lebanon could instead bring the threat of renewed war back to the fore.