US-Iran interim deal reopens Hormuz, restarts nuclear talks

Cairo,UPDATED: Jun 18, 2026 15:04 IST

The United States and Iran have reached an interim deal to end their war, reopen the Strait of Hormuz and return to negotiations over Tehran's nuclear programme. The agreement also gives Iran an immediate economic gain by allowing it to sell oil freely again, according to details released by both sides.

The two countries will now enter a 60-day negotiation period. The deal largely takes them back to where they were three-and-a-half months ago, before Israel and the US launched the war that left thousands dead across the region, triggered a global energy crisis and shook the American economy.

US President Donald Trump signed a physical copy of the deal on Wednesday while dining with French President Emmanuel Macron at the Palace of Versailles. In Tehran, President Masoud Pezeshkian also signed the document, according to the state-run IRNA news agency, which published an image of him holding up the agreement bearing both signatures. Under the deal, the Strait of Hormuz will reopen and the US will lift its blockade of Iranian ports. US officials, speaking on condition of anonymity to discuss the draft, said passage through the waterway will be toll-free for 60 days, although the agreement does not rule out fees after that. Before the war, about a fifth of the world's traded oil supplies passed through the strait. Iran's closure of the route had pushed up fuel prices globally, made food and products such as fertiliser more expensive, and helped raise US inflation to 4 per cent ahead of this autumn's midterm congressional elections.

The agreement immediately waives, but does not remove, sanctions imposed by Trump on Iranian oil exports, allowing Tehran to sell crude on the world market again. Last year, Iran earned an estimated USD 45 billion from oil sales, but had only one major buyer, China, and had to use a shadow fleet of tankers to avoid sanctions. Since the blockade began in April, its exports had nearly come to a halt. The draft also says Iran's highly enriched uranium will be "downblended", or diluted, under the supervision of the Atomic Energy Agency, though it gives no further detail. Future talks are expected to cover any other restrictions on Iran's nuclear programme. The interim deal also outlines possible future incentives, including the eventual lifting of all international sanctions, a USD 300 billion post-war reconstruction fund, and the unfreezing of billions of dollars in Iranian assets held abroad. Trump has said the US will not contribute to the reconstruction fund.

At the same time, Iran's missile arsenal and its backing for regional allies do not appear to be part of the coming negotiations. The Trump administration had said its war aims were to "obliterate" Iran's missile arsenal, "sever its support" for armed proxies, "annihilate its navy", and ensure it never gets a nuclear weapon. The seven weeks of US-Israeli bombardment are believed to have heavily damaged Iran's missile arsenal, production facilities and other parts of its military, although the extent of that damage is unclear. Iran was still firing on Israel as recently as last week, and its ties with Hezbollah in Lebanon, the Houthis in Yemen and Shiite militias in Iraq appear unchanged. The deal also calls for an end to the war in Lebanon, but Israel and Hezbollah are not parties to the agreement. Iran says Israel must withdraw from the large area of southern Lebanon it occupies, while the deal only guarantees Lebanon's "territorial integrity". Israel has said it will keep troops in Lebanon, and Hezbollah has said it will resist Israel "until full withdrawal is achieved".

The agreement has also exposed strain in US-Israeli ties. Israel was left out of the negotiations with Iran, and politicians across the Israeli spectrum have criticised the deal and blamed Prime Minister Benjamin Netanyahu. Tensions between Trump and Netanyahu have at times surfaced publicly, including when Trump called the Israeli leader "crazy". At the G7 summit in France this week, Trump said Netanyahu "has to be more responsible with respect to Lebanon". Much will now depend on whether the final agreement goes beyond the 2015 nuclear accord, which Trump later abandoned, and whether Washington can secure stricter and longer-lasting limits on Iran's nuclear programme. Iran, for its part, continues to insist that its programme is for peaceful purposes.

With PTI Inputs

- Ends