US-Iran Deal Could Reopen Strait of Hormuz Under 60-Day Pact

The United States and Iran are nearing a 60-day memorandum of understanding that would reopen the Strait of Hormuz and initiate new nuclear talks, according to a US official. The deal, which the White House hopes to announce by May 24, could see significant volumes of Iranian oil return to the market, potentially easing global energy prices.

"The core principle is 'action for relief,'" a US official told Axios, outlining the framework. While Iran has requested an immediate unfreezing of assets and a permanent lifting of sanctions, the official said those steps would only follow substantive concessions from Tehran.

The agreement would see Iran clear mines from the Strait of Hormuz, guaranteeing free passage for ships. In return, the US would lift its blockade of Iranian ports and grant sanctions waivers allowing the country to freely sell its oil. The pact also reportedly involves unfreezing as much as $20 billion in Iranian assets, a substantial increase from the $6 billion discussed in earlier proposals.

This potential agreement marks the most significant diplomatic progress after months of heightened military tension. With the Strait of Hormuz accounting for roughly 20% of global oil shipments, its reopening would directly address supply concerns that have kept energy markets on edge. The 60-day period creates a critical window for negotiating a successor to the original JCPOA nuclear deal, which could reshape geopolitical risk across the Middle East.

What's on the Table

The framework for the deal is a 14-point memorandum of understanding facilitated by Pakistani intermediaries, according to reports. US envoys Steve Witkoff and Jared Kushner have been leading the American delegation in talks with representatives for Iranian President Masoud Pezeshkian.

Under the terms of the draft MOU, Iran would commit to never seeking nuclear weapons and enter negotiations to suspend its uranium enrichment activities and transfer its existing stockpile of highly enriched uranium. The agreement also reportedly includes a provision to end the ongoing conflict between Israel and Lebanon's Hezbollah, adding another layer of regional de-escalation. While some reports mentioned a 30-day window for talks, the latest details point to a 60-day renewable period for the initial agreement.

Market Reaction and Forward Outlook

News of the impending deal has already sent ripples through financial markets. Prediction markets show increased confidence in a resolution, with the "Strait of Hormuz Traffic Normal by July 31" contract rising to 60% probability. In line with this, WTI crude oil price expectations for 2026 have fallen, suggesting traders anticipate lower prices from increased Iranian supply.

For investors, the two key signals to watch are Brent crude prices and the US dollar index. A sustained move lower in oil would confirm that energy markets believe the de-escalation is durable. A weaker dollar could also follow as its safe-haven appeal diminishes, a scenario that has historically been constructive for assets like Bitcoin, which has traded in a tight range between $68,000 and $77,000 on negotiation headlines. However, failure to finalize the deal could see the recent pause in military operations reversed, likely sending risk assets sharply lower.

This article is for informational purposes only and does not constitute investment advice.