Iran is evaluating a new proposal from the United States to end their nearly 10-week war, according to a person familiar with the matter, as China added its voice to global diplomatic pressure to wrap up the conflict.
US Proposal Details
Washington's one-page memorandum of understanding will, if Iran accepts it, lead to the gradual reopening of the Strait of Hormuz and lifting of the American blockade on Iranian ports, according to the person, who asked not to be identified discussing sensitive information. Nothing has yet been agreed, the person said, and detailed negotiations on Iran's nuclear program will come later in the process.
Axios earlier reported on the plan, which includes provisions for the potential removal of sanctions on Tehran, the person said.
Iran's Response Expected
Iran is expected to send a response via mediator Pakistan in the next two days, the person said. At a meeting in Beijing, China's Foreign Minister Wang Yi urged Iranian counterpart Abbas Araghchi to keep negotiating, saying 'a resumption of hostilities is inadvisable.'
Oil Prices Plunge
Oil plunged on the news, with Brent crude dropping more than 10 percent to below US$100 a barrel for the first time since late April. Global government bonds extended gains as market optimism grew about a resolution to the conflict.
Pressure on Trump
News of the potential breakthrough came as U.S. President Donald Trump comes under increasing pressure to end the war he started alongside Israel at the end of February. The shuttering of Hormuz has blocked a key transit point for global energy supplies, triggering a surge in U.S. gasoline prices to above US$4.50 a gallon for the first time since July 2022. That has piled pressure on the Republican Party ahead of Midterm elections this November.
Trump on Tuesday suspended a military initiative to guide stranded ships through Hormuz after only one day of operations, 'to see whether or not the agreement can be finalized and signed.' He cited 'great progress' with Iran toward a final agreement, without giving further detail.
Project Freedom and Ceasefire
The U.S. Hormuz plan — which Trump dubbed Project Freedom — resulted in clashes with Iran and missiles fired at the United Arab Emirates. That forced Washington to insist an almost month-long ceasefire remains in place, and Beijing used a rare public comment on the conflict to warn against a return to fighting.
Israeli Energy Minister Eli Cohen said it may be best to wait and see if the U.S.-Iran deal comes to fruition. 'We know the Iranians, they say one thing, they mean something else,' he said in an interview with Army Radio.
Trump said the decision to pause Project Freedom was made at the request of Pakistan — which is helping mediate talks between Washington and Tehran — as well as other countries. He added that a U.S. blockade of ships transiting to and from Iranian ports would 'remain in full force and effect.'
