Trump and Iran Sign Peace Deal to Reopen Strait of Hormuz

President Donald Trump and Iranian President Masoud Pezeshkian signed a 14-point memorandum of understanding in mid-June 2026 to end a conflict that began on February 28. The agreement mandates the immediate reopening of the Strait of Hormuz and the lifting of a U.S. naval blockade on Iranian ports. To facilitate the recovery of global energy flows, the U.S. Treasury Department issued a 60-day general license authorizing the sale of Iranian crude oil and petroleum products through August 21.

The diplomatic breakthrough caused Brent crude prices to plummet from peaks near $120 per barrel to below $80, while U.S. national average gasoline prices fell below $4 per gallon for the first time since March. By June 23, Trump reported a record 19 million barrels of oil flowing through the strait in a single day. However, the recovery remains fragile; the U.S. Navy continues to oversee transits via a southern route near Oman to avoid Iranian sea mines, and Iran briefly claimed the strait was closed again on June 20 following Israeli strikes in Lebanon.

Global financial institutions, including Goldman Sachs, lowered their long-term oil price forecasts, though the IMF and Bank of England warned that economic scarring and previous inflation spikes would keep costs elevated for months. While the interim deal established a 60-day negotiation window for a permanent accord, tensions persist over Iran's nuclear program and the creation of the Persian Gulf Strait Authority, which the U.S. claims violates international law by attempting to levy transit fees.