US-Iran Interim Peace Deal Signed; Tehran Plans to Charge Ships Transiting Strait of Hormuz

The United States and Iran have signed an interim peace agreement that extends a ceasefire by 60 days to allow both sides to negotiate a final truce. US President Donald Trump and Iranian President Masoud Pezeshkian both signed the memorandum of understanding, with Trump initially signing digitally over the weekend alongside Vice President JD Vance, followed by a physical signature on Wednesday while dining with French President Emmanuel Macron at the Palace of Versailles. Iranian state media released images of Pezeshkian holding the signed agreement. The White House had planned a signing ceremony in Switzerland for Friday, but the event's status remains uncertain amid conflicting information from the US, Iran, and mediator Pakistan.

A central point of contention concerns the Strait of Hormuz, a vital waterway through which approximately one-fifth of global oil and liquefied natural gas supplies transit. Iran has declared it will not return to "prewar conditions" and intends to charge ships for passage after an initial 60-day toll-free period. Chief Iranian negotiator Mohammad Bagher Ghalibaf stated on state television that "Iran has the right to sovereignty over the strait of Hormuz and of course we will receive a fee for services." Iranian Foreign Ministry Spokesperson Esmail Baghaei indicated the strait's management would be a responsibility shared between Iran and Oman. Trump previously stated he would not accept tolls on the strategic route, but defended the agreement by arguing that without it the strait "would never have been opened" and a "worldwide depression" would result.

The agreement has been shrouded in secrecy since negotiations began. US officials initially refused to disclose the terms even after confirming the digital signing over the weekend, according to the Associated Press. Washington has not formally released the full text of the agreement, though US officials provided draft language to journalists on condition of anonymity, and Iranian state media released text that largely aligned with US accounts. Trump threatened to resume attacks and kill Iranian officials if Iran fails to honour its commitments under the deal.

Financial markets responded cautiously to the interim agreement. Asian stocks remained steady, with Japan's Nikkei share average rallying to another record high driven by semiconductor and artificial intelligence-related gains. Oil prices declined following the signing, reflecting optimism about the strait potentially reopening. US crude fell 1.25 percent to $75.83 a barrel, while Brent crude dropped 1.4 percent to $78.41 a barrel. Brent crude futures earlier fell below $80, their lowest level since the Iran war began in late February. The International Energy Agency forecast the oil market would move into a significant supply surplus in 2027 following recovery from the strait closure. Market analysts noted that major geopolitical risks persist and will continue to influence investor behaviour.