Trump Declares US and Iran Deal 95 Percent Complete as Both Sides Agree in Principle to 60-Day Hormuz Truce

Elementary

The United States and Iran are closing in on a major peace agreement to end months of military conflict. President Donald Trump declared on May 27 that the deal is 95 percent complete, making it the most optimistic public statement either side has made. American envoys Steve Witkoff and Jared Kushner have been leading the negotiations, with Qatar and Pakistan acting as key go-betweens.

The proposed deal is a 60-day memorandum of understanding focused on reopening the Strait of Hormuz. This narrow waterway carries around 20 percent of the world's oil supply, but it has been disrupted since Iran placed naval mines in the water and the United States set up a naval blockade. Under the deal, Iran would remove the mines and the US would lift its blockade on Iranian ports.

The United States would also issue temporary sanctions waivers, meaning Iran could sell its oil on world markets for the 60-day period. In return, Iran has agreed in principle to commit to never seeking nuclear weapons and to enter talks about suspending its uranium enrichment program. Secretary of State Marco Rubio confirmed that significant progress had been made, though small details were still being decided.

Oil markets responded quickly to the news. Brent crude oil fell from over 108 dollars a barrel earlier in the week to around 105 dollars as traders expected more Iranian oil to arrive on world markets. Analysts warned, however, that no deal has been formally signed yet, and earlier rounds of negotiations had collapsed over disagreements about how quickly sanctions would be lifted.

envoy: an official representative sent by a government to negotiate on its behalf

intermediary: a person or country that helps two sides communicate and reach an agreement

memorandum of understanding: a written document recording what two sides have agreed to do, even if it is not a final treaty

uranium enrichment: a process that increases the concentration of a certain form of uranium, used in nuclear energy or weapons

sanctions waivers: official permissions that allow certain activities normally blocked by economic penalties

Brent crude: a widely traded type of oil from the North Sea, used as a global price reference

blockade: the use of military force or ships to prevent goods or people from entering or leaving an area

negotiations: discussions between two or more sides trying to reach an agreement

Intermediate

US President Donald Trump announced on May 27 that a framework accord between the United States and Iran is 95 percent finalized, describing the proposed 60-day memorandum of understanding as the closest the two countries have come to ending hostilities since the conflict began earlier in 2026. Envoys Steve Witkoff and Jared Kushner have conducted the American side of the diplomacy, with Qatar serving as the primary host for face-to-face talks and Pakistan's Prime Minister Shehbaz Sharif providing additional mediation channels.

The core terms of the proposed MoU center on the Strait of Hormuz, a 21-nautical-mile-wide chokepoint through which roughly 20 percent of global oil trade passes. Iran would commit to clearing the naval mines it deployed in the strait and its approaches, while the United States would lift the naval blockade it imposed on Iranian ports. Simultaneously, the US Treasury would issue limited oil-sanctions waivers allowing Iran to resume exports to vetted buyers for the duration of the agreement, providing Tehran with immediate hard-currency relief without permanently dismantling the existing sanctions architecture.

The nuclear dimension of the accord is more politically sensitive. Iran has agreed in principle to a written commitment that it will never develop nuclear weapons and to enter structured talks, within the 60-day window, on freezing uranium enrichment above reactor grade and drawing down its stockpile of highly enriched uranium. American officials emphasize that these provisions are a necessary precondition for any final peace treaty, while Iranian negotiators have insisted the wording not imply permanent abandonment of civilian enrichment rights under the Nuclear Non-Proliferation Treaty.

Energy markets reflected cautious optimism. Brent crude eased from an intraday high above 108 dollars a barrel to approximately 105 dollars as traders priced in a modest increase in Iranian crude supply. Analysts at Goldman Sachs estimated that a successful 60-day truce could add 800,000 to 1.1 million barrels per day of Iranian output to global markets, enough to relieve some of the supply-side pressure that has kept prices elevated since the conflict began. However, analysts were quick to note that three prior rounds of negotiations had collapsed over disagreements on sanctions sequencing and enrichment rights, and no document has been formally signed.

framework accord: a broad, preliminary agreement that outlines the main principles of a deal before the final details are completed

chokepoint: a narrow strategic passage whose control gives significant power over trade or military movement

sanctions architecture: the entire system of economic penalties and restrictions imposed on a country

hard-currency relief: an easing of financial pressure by allowing a country to earn internationally accepted currencies such as US dollars

reactor grade: uranium enriched to a level suitable for powering a nuclear reactor but far below weapons-grade concentration

Nuclear Non-Proliferation Treaty: an international agreement aimed at preventing the spread of nuclear weapons while allowing peaceful nuclear energy use

sanctions sequencing: the order in which economic penalties are lifted or tightened as part of a negotiated agreement

vetted buyers: purchasers who have been officially approved and checked to ensure they meet required standards

Advanced

US President Donald Trump publicly declared on May 27 that a memorandum of understanding between Washington and Tehran is 95 percent finalized, elevating the diplomatic temperature around the most consequential bilateral negotiation since the 2015 Joint Comprehensive Plan of Action. The MoU, as reported by Axios and corroborated by Al Jazeera and CNN, is structured as a 60-day confidence-building instrument extendable by mutual consent, designed to create the political space for a comprehensive peace treaty while delivering immediate material concessions to both sides. Envoys Steve Witkoff and Jared Kushner have conducted shuttle diplomacy across Doha, Islamabad and Muscat, with Qatari Foreign Minister Mohammed bin Abdulrahman Al Thani and Pakistani PM Shehbaz Sharif serving as the primary interlocutors with Iran's Foreign Minister Abbas Araghchi.

The operational core of the MoU addresses the Strait of Hormuz, a 21-nautical-mile chokepoint at its narrowest point whose closure would sever the transit of an estimated 17 to 20 percent of globally traded crude and liquefied natural gas, including volumes indispensable to South Korean, Japanese, Indian and European refiners. Iran would undertake verifiable mine-clearance operations along the inbound and outbound traffic separation schemes, while the United States would stand down its naval blockade of Iranian export terminals. A parallel Treasury Office of Foreign Assets Control instrument would issue time-limited, renewable waivers authorizing purchases of Iranian crude by vetted non-sanctioned counterparties, preserving the underlying sanctions architecture while creating a legal pathway for resumed Iranian exports estimated at 800,000 to 1.1 million barrels per day.

The nuclear provisions represent the most contested terrain in the final drafting. The US position, publicly articulated by Secretary Rubio and NSA-designate Waltz, requires Iran to make a binding written commitment to never develop nuclear weapons and to enter structured talks, within the 60-day window, on capping uranium enrichment below 20 percent U-235 and drawing down the approximately 400 kilograms of near-weapons-grade material already stockpiled. Iranian negotiators, citing Article IV of the Nuclear Non-Proliferation Treaty, have insisted on language preserving the sovereign right to peaceful enrichment at reactor grade, and have rejected any formulation that pre-commits Tehran to zero enrichment as a permanent outcome. The current impasse reportedly turns on a single adverbial clause distinguishing a freeze from an indefinite suspension.

Energy and financial markets have priced in a cautious base case. Brent crude retreated from an intraday high of 108.40 dollars per barrel to a close near 104.80 dollars, with the 12-month strip reflecting a roughly 6-dollar risk premium for Hormuz disruption that would collapse on formal signing. Lloyd's of London war-risk underwriters have provisionally reduced their aggregate probable maximum loss estimates for VLCC hull cover in the Gulf, though formal rate revisions await a signed text. The risk scenario most cited by trading desks is a repeat of the May 15 pattern, when a preliminary Axios report of a near-finalized deal was followed within 48 hours by a public Iranian denial, producing a 4-dollar round trip in Brent before positions could be unwound.

Joint Comprehensive Plan of Action: the 2015 multilateral nuclear agreement between Iran and six world powers that limited Iran's enrichment activities in exchange for sanctions relief

traffic separation scheme: a maritime traffic management system designating lanes for ships entering and exiting a narrow waterway to reduce collision risk

OFAC: the US Treasury's Office of Foreign Assets Control, which administers and enforces economic sanctions programs

Article IV of the NPT: the clause of the Nuclear Non-Proliferation Treaty that affirms the inalienable right of all signatories to develop nuclear energy for peaceful purposes

U-235: uranium-235, the fissile isotope of uranium used both in nuclear reactors and, at high enrichment levels, in nuclear weapons

probable maximum loss: an insurer's estimate of the largest expected loss from a single catastrophic event, used to set reserve capital requirements

VLCC: Very Large Crude Carrier, a supertanker capable of transporting 2 million barrels of crude oil

12-month strip: the average price of a commodity derived from futures contracts covering each of the next 12 months, used as a benchmark for market expectations

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Trump Declares US and Iran Deal 95 Percent Complete as Both Sides Agree in Principle to 60-Day Hormuz Truce

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