Trump signals Iran strait deal progress

President Donald Trump said a proposed agreement with Iran to reopen the Strait of Hormuz has been “largely negotiated”, raising hopes of a diplomatic breakthrough after months of conflict disrupted one of the world’s most important energy routes. Final terms are still being discussed among Washington, Tehran and regional governments, with an announcement expected once the remaining points are settled.

Trump said the framework followed calls with leaders and representatives from Saudi Arabia, the UAE, Qatar, Pakistan, Turkey, Egypt, Jordan and Bahrain, alongside a separate discussion with Israeli Prime Minister Benjamin Netanyahu. He described the emerging arrangement as a peace memorandum that would include the reopening of Hormuz, although Tehran pushed back against any suggestion that control of the waterway would shift away from Iran.

Iranian state-linked reporting indicated that ship traffic could return closer to pre-war levels under a possible agreement, but stressed that the strait would remain under Iranian management. That distinction is central to the political sensitivity around the negotiations, as Iran regards the waterway as a sovereign security matter while Gulf states, Asian buyers and Western governments view uninterrupted passage as essential to global energy stability.

Draft terms under discussion include an extension of the ceasefire, a phased easing of restrictions on Iranian oil sales, movement on blocked Iranian ports and a route towards wider talks on Tehran’s nuclear programme. The package remains unfinished and could still face resistance from hardliners in Washington, Tehran and Israel, especially over uranium enrichment, sanctions relief and the sequencing of maritime access.

Pakistan has emerged as a key mediator, with Prime Minister Shehbaz Sharif signalling that Islamabad hopes to host further talks soon. Qatar, Egypt and other regional governments have also been involved in efforts to keep diplomatic channels open, reflecting broad concern that any prolonged closure or partial disruption of Hormuz could deepen pressure on oil markets, shipping insurance, refinery supply chains and consumer fuel prices.

The Strait of Hormuz links the Gulf with the Gulf of Oman and the Arabian Sea, making it the only maritime outlet for much of the crude and liquefied natural gas exported from the region. Oil flows through the strait averaged about 20 million barrels per day in 2024, close to one-fifth of global petroleum liquids consumption, while volumes in early 2025 remained broadly stable before the conflict created severe shipping uncertainty.

Energy traders have treated the talks as a potential turning point, but the market reaction is likely to depend on whether ships can resume regular transits without military escorts, elevated insurance charges or inspection delays. Tanker movement has already been constrained by the war environment and enforcement measures around Iranian-linked cargoes, with limited traffic continuing despite the broader disruption to normal flows.

The political risks remain considerable for Trump. Republican critics have warned that a ceasefire-centred deal could leave Iran with too much leverage, while supporters of diplomacy argue that restoring maritime traffic and limiting escalation should take priority over another round of strikes. The administration also faces domestic pressure from energy prices, with any sustained disruption at Hormuz carrying direct consequences for inflation, transport costs and industrial supply chains.

For Iran, the negotiations offer a possible route to revive oil exports and reduce economic strain while preserving a claim of control over the strait. Tehran’s public stance suggests it is willing to discuss traffic levels and broader de-escalation, but not to accept language implying outside authority over Hormuz. That gap between operational reopening and political control is likely to dominate the final stage of bargaining.

Israel’s role adds another layer of complexity. Netanyahu’s government has treated Iran’s military and nuclear capabilities as a central security threat, and any agreement that delays further confrontation without binding limits on enrichment could face scrutiny from Israeli officials and their allies in Washington. At the same time, Gulf governments have strong incentives to prevent another escalation near their export terminals and shipping corridors.