The United States and Iran signed a memorandum of understanding on Friday, June 14, 2026, to halt hostilities and reopen the Strait of Hormuz [1].
The agreement aims to stabilize global energy supplies by securing one of the world's most vital shipping lanes. The deal follows mediation by the prime minister of Pakistan and was finalized in Switzerland [1, 2].
Global markets reacted to the news. Brent crude futures fell by more than four percent [2]. This price drop reflects a reduction in the risk premium that had been driving energy costs higher during the conflict [2].
Under the terms of the memorandum, the U.S. naval blockade of Iranian ports will end. Donald Trump said the Strait of Hormuz will be open "toll free" [1].
The agreement seeks to end the broader U.S.-Iran conflict and ensure the free flow of oil to international markets [2]. The move comes as energy volatility had created significant economic pressure on importing nations [2].
While some market reports previously indicated that oil prices rose due to U.S. airstrikes, the confirmed signing of the memorandum led to the subsequent decline in futures [2].
“The Strait of Hormuz will be open 'toll free' and the U.S. naval blockade of Iranian ports will also end.”
The reopening of the Strait of Hormuz removes a primary geopolitical bottleneck for global oil transit. By ending the naval blockade and halting hostilities, the U.S. and Iran have reduced the immediate threat of a supply shock, which typically leads to lower crude prices and provides temporary relief for global inflation tied to energy costs.
