The Trump administration has submitted a one-page memorandum of understanding (MoU) to Iran in its latest diplomatic effort to end the 10-week conflict. The proposal offers a phased reopening of the Strait of Hormuz and an end to port blockades in exchange for a sustainable ceasefire.
China has also intervened, urging Tehran to stay at the negotiating table to avoid a return to active hostilities. Iran is expected to provide an official response through a Pakistani mediator within the next 48 hours, while the issue of its nuclear program will be discussed in a separate phase.
The news of the potential peace caused the price of Brent crude to plunge more than 10% below $100 a barrel. The market reaction reflected global hopes for a recovery in energy supply chains, as the previous closure of the Strait of Hormuz had paralyzed a fifth of the world's oil flow.
President Trump has suspended the military operation "Project Freedom" to make room for the diplomatic process. The move comes amid domestic political pressure in the US over soaring gasoline prices, which are feared to be hurting the Republican Party's chances in the upcoming midterm elections.
Despite signs of progress, Israel has voiced doubts about Tehran's sincerity in the talks. The international shipping industry is still waiting for full safety assurances for the more than 1,550 commercial ships still stuck in the Persian Gulf.
