US and Iran Sign 14-Point Deal to End The War

In a major diplomatic turn, the United States and Iran have officially signed a preliminary 14-point ceasefire extension aimed at permanently ending the war that has taken over the Middle East.

The agreement, structured as a Memorandum of Understanding (MoU), was finalized remotely on Wednesday night. US President Donald Trump signed the document while attending the G7 summit in France during a post-summit dinner at the Palace of Versailles, while Iranian President Masoud Pezeshkian also affixed his signature. The sudden remote signing has left the status of a planned formal ceremony in Geneva, Switzerland, this Friday up in the air.

The unexpected diplomatic breakthrough had an immediate impact on global markets on Thursday morning. Crude oil prices tumbled by more than $2 a barrel, with Brent crude dropping 2.69% to $77.41 and US West Texas Intermediate (WTI) falling 3.07% to $74.43. The sharp drop reversed a brief market spike on Wednesday that was triggered when President Trump warned he could easily pivot back to a military campaign if Iran's leaders "don't behave".

Inside the 14-Point Agreement

The interim accord kicks off a strict 60-day countdown for both nations to negotiate a comprehensive final deal, though this timeline can be extended if both sides agree. While the text leaves several complex geopolitical issues unresolved, it establishes a functional framework to halt hostilities and restore global trade routes.

1. Stopping the Fighting "on all fronts"

The agreement demands an "immediate and permanent" end to military actions "on all fronts", explicitly highlighting that Lebanon is covered under the truce. This inclusion addresses a core concern for Tehran, which has warned that continued Israeli military operations against Hezbollah would count as a "violation of the understanding" and that "necessary measures will be taken". Under the text, all participating sides pledge that "from now on" they will respect "the territorial integrity and sovereignty" of Lebanon, steering toward an ultimate "termination" of the conflict.

2. Opening the Strait of Hormuz

A central priority for the US and global energy markets is the immediate stabilization of the Strait of Hormuz. Iran has promised to "make arrangements using its best efforts" to ensure commercial ships can safely pass through the vital maritime lane with "no charge". Traffic is intended to resume "immediately" as teams work to clear physical "obstacles" and run de-mining operations. In the long term, regional Gulf states intend to collaborate on a "broader" framework to safeguard free transit.

3. Lifting Blockades and Withdrawing Troops

With the MoU signed, Washington will begin unwinding its naval blockade on Iranian ports, aiming to dismantle it entirely within 30 days. Furthermore, the US has agreed to pull its military forces away from the "proximity of Iran" within 30 days of signing a final comprehensive treaty, resetting its regional military presence back to where it stood before hostilities broke out on February 28th.

4. Non-Interference and Nuclear Safeguards

The two nations have agreed to "respect each other's sovereignty and territorial integrity" and promise not to meddle in each other's "internal affairs", a concession likely to frustrate Iranian dissident networks who remember Trump's promise that "help is on the way" during past anti-government protests.

Crucially, Iran "reaffirms that it shall not procure or develop nuclear weapons". Tehran’s existing supply of enriched uranium must be safely disposed of or downblended on-site under the direct watch of the International Atomic Energy Agency (IAEA). US officials hailed this absolute nuclear restriction as a "major win".

The Trump administration has heavily emphasized that the entire roadmap is "performance-based", meaning Tehran will only access economic relief as it proves compliance with its nuclear obligations.

Once a final deal is locked in, the US will roll back its economic sanctions. To ease the transition, Washington will immediately maintain a temporary "status quo", issuing specialized waivers for Iranian crude oil exports, petroleum derivatives, transport, and international banking transactions. The US also "undertakes to make fully available frozen or restricted funds" in incremental stages to reward verified compliance.

The agreement also mandates the creation of a massive $300bn economic package dedicated to the "reconstruction and economic development" of Iran. However, the White House has made it clear to domestic voters that the US will not be paying "a cent of money" toward this fund. Instead, regional partners will finance the projects; for instance, if Tehran "behaves", the United Arab Emirates could fund a new domestic power plant with Washington's explicit blessing.

While energy markets are aggressively adjusting to the expected return of Iranian oil, industry experts urge short-term caution. Analysts point out that actual shipping volumes might take time to recover because some tankers are already using alternative routes, and security jitters could leave shipowners hesitant to immediately enter the region.

However, the longer-term outlook points to an absolute shift. The International Energy Agency (IEA) warned that if the truce holds, this year's intense energy shortages could transform into a massive global supply glut by 2027, with production outpacing demand by over 5 million barrels per day. Adding extra downward pressure on oil prices are shifting economic projections from the US Federal Reserve, where a growing number of policymakers now believe a domestic interest rate hike may be required later this year to combat sticky inflation.

The implementation of the MoU will be tracked via a newly established monitoring "mechanism", and any final, comprehensive agreement will ultimately require the endorsement of a binding UN Security Council resolution.