- President Trump signed an MOU with Iran at the Palace of Versailles during the G7 summit, extending the US-Iran ceasefire by 60 days and shifting focus to the reopening of the Strait of Hormuz and negotiations over Tehran’s nuclear program.
- The deal allows Iran to restart oil exports immediately under US sanctions waivers and potentially access a $300 billion regional rehabilitation fund, drawing fierce criticism from Iran hawks — including Senator Ted Cruz and former VP Mike Pence — who say it concedes too much.
- Three Saudi supertankers carrying roughly 6 million barrels crossed the Strait of Hormuz for the first time since the war began, but widespread shipping confusion persists over mine clearance, passage permissions, and Iran’s reported plan to charge navigation fees.
- Oil fell 1.9% to $78.10/barrel on Thursday but remains ~30% higher for the year; energy traders say it will take months for Hormuz volumes to normalize, and the 60-day negotiating window is widely seen as too short for a comprehensive nuclear agreement.
What Happened?
At the close of the G7 summit in Versailles, President Trump signed a memorandum of understanding with Iran, flanked by French President Macron and Blackstone CEO Steve Schwarzman. The MOU extends the April ceasefire by 60 days, during which the US and Iran will attempt to agree on restrictions to Tehran’s nuclear program and a plan to dilute or destroy its highly enriched uranium stockpiles. Iran will be allowed to resume oil exports immediately under US sanctions waivers. Vice President Vance and Iranian Parliament Speaker Ghalibaf are scheduled to meet in Switzerland on Friday to formally mark the signing and launch the next negotiating round.
Why It Matters?
The deal ends more than three months of open conflict that shuttered the Strait of Hormuz, sent oil prices surging, and hammered Trump’s approval ratings ahead of midterm elections. But critics from both parties say it resembles the 2015 Obama-era nuclear deal Trump once called “the worst deal ever” — and may fall even shorter. Senator Cassidy called it “the worst foreign policy blunder in decades.” Pence said there is “no mention of verifiably dismantling the nuclear weapons program.” Nuclear experts widely agree that 60 days is insufficient to negotiate something as technically complex as uranium enrichment caps and destruction timelines, raising the likelihood of further extensions.
What’s Next?
The Vance-Ghalibaf talks in Switzerland on Friday will set the tone for the 60-day negotiating period. Key unresolved issues include: whether and how Iran will allow free passage through Hormuz (Iranian media has suggested the country may charge navigation fees, which the US, Europe, and Gulf states reject), the pace of sanctions relief, the fate of tens of billions in frozen Iranian funds, and the scope of uranium enrichment restrictions. Markets are watching closely — oil remains elevated and shipping executives say they need clarity on mine clearance and passage rules before restoring normal volumes through the strait.
Source: Bloomberg
