CNBC- The U.S. and Iran have agreed on a deal to bring their nearly four-month war to an end, with both sides declaring the immediate and permanent termination of military operations on all fronts, including in Lebanon, Pakistan Prime Minister Shehbaz Sharif said on Sunday.
“Following intensive talks, we are pleased to announce that the Peace Deal between the United States of America and Islamic Republic of Iran has been REACHED,” Sharif said in a post on X. Pakistan has served as a mediator between the two countries.
“The official signing ceremony will be on Friday, 19 June in Switzerland,” Sharif said.
U.S. President Donald Trump confirmed that a deal had been reached soon after the prime minister’s announcement. In a post on Truth Social, the president said: “The deal with the Islamic Republic of Iran is now complete.”
“I hereby fully authorize the toll free opening of the Strait of Hormuz, and, simultaneously herewith, authorize the immediate removal of the United States Naval blockade,” Trump wrote.
Trump, in a later post, said that the strait would open on Friday.
“With the opening of the Strait upon the signing of the Deal on Friday, for purposes of mine removal, oil will flow on both ends again for the Region, and the World!” he said.
The Associated Press reported that Iranian state media broadcast a television banner that said: “US was forced to sign an agreement to end the war.”
Iranian state TV also said the Iranian Foreign Ministry holds the U.S. and Israel “responsible for the dangerous consequences of the continued insecurity and tension in the region.”
The Ministry of Foreign Affairs in Qatar said in a statement that it welcomes the agreement, which includes measures to ensure freedom of navigation in the Strait of Hormuz. Qatar “considers it an important step towards consolidating sustainable peace and promoting economic growth regionally and internationally,” he said.
European nations, including the U.K., Germany, France and Italy, said Sunday they were willing to lift sanctions on Iran in exchange for the country taking steps on its nuclear program, Reuters reported.
“Iran must never acquire a nuclear weapon. We stand ready to work with the US, Iran and the IAEA to this end,” the nation’s leaders reportedly said in a joint statement.
On Friday, Iranian state media reported that a 14-page draft memorandum had been drawn up, outlining terms of a proposed peace deal that would include the U.S. lifting oil sanctions and Iran committing to reopening the Strait of Hormuz within 30 days.
The deal follows weeks of mixed messaging from both Washington and Tehran over the conflict’s trajectory, with a fragile ceasefire in place as diplomatic efforts were made to end the war.
The deal was put at risk earlier Sunday after the Israel Defense Forces said Iran-backed Hezbollah in Lebanon had launched projectiles into Israel. Subsequent Israeli strikes in Beirut prompted condemnation from Trump, who warned Iran and Hezbollah not to strike back.
Trump asked both sides not to “blow it.”
The Strait of Hormuz, a critical shipping route in the Middle East, has effectively been closed since the conflict began in late February. The blockade of the waterway has created severe supply constraints for various goods, including oil, gas and fertilizers, sparking price rises and fueling concerns about a return to stagflation.
Inflation has already begun to creep higher in many major economies, with America’s annual inflation rate hitting 4.2% in May – its highest level in three years.
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U.S. Vice President JD Vance, in an interview on Fox News immediately after the deal was struck, said the agreement was “a great thing for the American people.”
“I know that they suffer from high gas prices, the President has certainly been very concerned about that fact,” Vance said. “What we’re going to be able to do is drive down the cost of energy, not just now but for the long term.”
On Thursday, the European Central Bank announced a quarter-point rate hike, raising interest rates for the first time since 2023 as the Iran war continues to blow euro zone inflation off target.
The move made the ECB the first major global central bank to raise its key interest rate in response to the energy shock.
Market expectations have shifted throughout the war, with broad rate-cut expectations fading and being replaced by higher-for-longer interest-rate environments across economies.
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