The United States and Iran moved to the brink of a peace agreement on Friday, with President Trump saying a deal to end the war that has gripped energy markets since February could be signed as soon as this weekend in Europe. A senior administration official told reporters that Washington is 85% confident it will sign an agreement with Tehran, though the official cautioned that the outcome is not yet certain.
Iran’s Foreign Minister Abbas Araghchi said a memorandum of understanding “has never been closer.” The framework outlined by the Trump administration would reopen the Strait of Hormuz, lift the U.S. naval blockade, dismantle Iran’s nuclear program and remove its enriched uranium, with financial incentives for Iran if it complies. Trump had suspended planned military strikes against Iran earlier in the week while signaling that the two sides were close, even as he warned the U.S. could target Iran’s oil infrastructure if talks failed.
The diplomatic breakthrough caps a remarkable swing from the prior weekend, when an Israeli strike on Hezbollah targets in southern Beirut triggered an Iran-Israel exchange of fire that briefly reignited fears of a wider war. That escalation gave way within days to a mutual halt in attacks, and now to the most concrete movement toward a comprehensive settlement since the conflict began on February 28.
Significant gaps remain between the two sides’ positions, however. A document published Friday by Iran’s semi-official Mehr News Agency described terms more favorable to Tehran than the version outlined by Washington, and Iran has issued no formal response to the U.S. framework. Iran’s Fars news agency reported that Tehran was likely to accept a deal, but no final text has been approved by either side.
For energy markets, the prospect of a signed agreement has been the dominant driver this week. The reopening of the Strait of Hormuz — the chokepoint for roughly a fifth of global oil and LNG flows, effectively closed under a dual U.S.-Iran blockade since the war began — would unwind the supply disruption that sent crude above $100 at its peak. Oil prices fell sharply Friday on the optimism, with WTI settling at $84.88 and Brent at $87.33, the international benchmark’s lowest level since early March.
Analysts cautioned that a signing would mark a beginning rather than an end for the physical market. Even with a deal, reopening the strait would require clearing mines, restarting idled production fields, and repairing energy facilities damaged by months of drone and missile attacks. Drones were still reported targeting commercial vessels in the strait this week, and Iran has at times threatened to keep the waterway closed absent an agreement — a reminder that the path from a signed text to normalized flows remains long.
Continuing coverage: Geopolitics · Iran · Strait of Hormuz Explainer.