U.S. President Donald Trump arrived in France on June 15 for the G7 summit, the first such meeting since the outbreak of US-Iran hostilities. He brought a diplomatic achievement: a preliminary agreement between Washington and Tehran to end the conflict and reopen the Strait of Hormuz. The formal text is expected to be signed on June 19 in Geneva.
Vice President JD Vance confirmed that an initial memorandum of understanding was signed electronically last Sunday. The final version will be released Friday in Geneva, followed by roughly 60 days of technical negotiations. The core of the deal includes the immediate reopening of the Strait of Hormuz without a toll system, and the lifting of the US naval blockade on Iran. Nuclear issues are deferred to later talks.
Oil Prices Dive, Shipping Sector Wary
Markets reacted swiftly. West Texas Intermediate crude fell about 4.9% to close at $80.75 per barrel, while Brent crude dropped roughly 4.8% to $83.17, according to CNBC. The plunge reflects traders betting that restored passage through the strait—which carries about 20% of global oil supply—will ease supply tightness.
However, the shipping industry remains cautious. Bimco, the international shipping association, noted that statements from both sides lack clarity, with no specific timeline or safe-corridor information provided. Actual resumption of navigation still faces uncertainty.
IAEA to Return, Help Destroy Enriched Uranium
The most sensitive part of the framework involves nuclear oversight. Vance told NBC News that the memorandum explicitly includes the return of International Atomic Energy Agency (IAEA) experts to Iran, with the U.S. and IAEA assisting in destroying Iran's stockpile of highly enriched uranium. He said this is "clearly written" in the document, though technical details remain for implementation. Whether it will be fully executed is still an open question.
Ukraine Conflict Also on G7 Agenda
Beyond the US-Iran deal, the G7 agenda includes the ongoing Russia-Ukraine war. Ukrainian President Volodymyr Zelensky is scheduled to meet with G7 leaders on Tuesday to discuss the conflict, though no one-on-one meeting with Trump has been arranged. Trump spoke separately with Zelensky and Russian President Vladimir Putin last Sunday. French President Emmanuel Macron called the US-Iran agreement "a very important step toward peace," setting a conciliatory tone for the host.