Iran and Israel agreed to halt attacks against each other on Tuesday, boosting hopes that peace negotiations can move forward after a weekend exchange of strikes threatened the fragile ceasefire and briefly raised fears of a broader regional escalation. The de-escalation capped a volatile seventy-two hours that began with Israel’s strike on Hezbollah targets in southern Beirut and ended with both militaries standing down.
The sequence unfolded rapidly. After Sunday’s Israeli strikes on Beirut’s southern suburbs, Iran followed through on its warning and exchanged strikes with Israel over the weekend, breaching the ceasefire that had held, however tenuously, since April. By Monday, Iran stated it had ended its military operations against Israel, and Israel signaled it would hold fire. Tuesday’s mutual halt formalized the stand-down.
President Trump urged both sides to de-escalate and said the two countries are close to a new ceasefire, with progress between Washington and Tehran easing concerns that the escalation would derail the negotiations aimed at gradually restoring oil exports through the Persian Gulf. Oil prices, he added, should ease once the conflict ends. The comments reframed a weekend that had looked like the unraveling of the diplomatic track into what the administration now casts as a brief and contained breach.
Tehran attached a condition to its restraint. Iran warned that operations could resume if Israel continues its campaign against Hezbollah in Lebanon — the same linkage that has repeatedly entangled the Lebanon front with the U.S.-Iran negotiations over the Strait of Hormuz. The halt in attacks, in other words, is a de-escalation rather than a resolution: the underlying disputes over Lebanon, the strait, and Iran’s nuclear program all remain open.
Markets read the stand-down as a green light to unwind the weekend’s risk premium. Crude fell below $90 a barrel Tuesday after WTI had spiked to $95 early Monday on the exchanges; Brent surrendered most of its move past $98, falling below $93. The round-trip underscored how much of the price action remains a referendum on the diplomacy rather than on physical flows, which remain throttled with the strait still effectively closed under the dual U.S.-Iran blockade.
The episode also clarified the stakes around the next steps. A formalized new ceasefire — which Trump says is close — would reopen the path toward the memorandum of understanding framework for a phased Hormuz reopening that negotiators have circled for weeks. Fitch Ratings said this week the strait could reopen around the end of July, though it cautioned the timing remains highly uncertain. For now, the guns have quieted, the talks have survived their sternest test in weeks, and the market is again pricing progress.
Continuing coverage: Geopolitics · Iran · Strait of Hormuz Explainer.