The United States and Iran have reached agreement on the text of a memorandum of understanding aimed at de-escalating their conflict, a development that immediately sent oil prices dropping by more than 4%. Pakistani Prime Minister Shehbaz Sharif announced the deal around June 12-13, 2026, calling it a “final, agreed upon text.”

Iranian Foreign Minister Abbas Araghchi labeled reports of a completed deal as speculative, noting that no binding agreement has actually been established.

What the framework actually includes

The proposed memorandum covers three main pillars. First, an immediate 60-day ceasefire between the two nations. Second, the reopening of the Strait of Hormuz to commercial shipping, with suggestions of toll-free access for certain trade routes. Third, a framework for discussing Iran’s nuclear program alongside conditional sanctions relief.

Roughly one-fifth of the world’s oil supply passes through the Strait of Hormuz, and its closure during recent hostilities created a supply bottleneck that rippled through energy markets worldwide.

On the financial side, discussions have centered on releasing frozen Iranian assets estimated between $12 billion and $25 billion. The final number would depend on compliance milestones that Iran would need to hit under the terms of the agreement.

Notably absent from this initial framework is any discussion of Iran’s nuclear enrichment levels or existing stockpiles. That’s being kicked down the road to future negotiations.

How we got here

Formal talks began in April 2025, initially mediated by Oman, which has historically served as a backchannel between Washington and Tehran. Pakistan joined the mediation effort more recently, and it was Sharif who ultimately announced the framework agreement.

The backdrop is a series of aggressive military exchanges earlier in 2026 that brought both nations closer to outright war than at any point in decades. This framework represents the closest the US and Iran have come to meaningful de-escalation since hostilities reignited. It is not a restoration of normal diplomatic relations, but a preliminary measure designed to create enough breathing room for actual negotiations to happen.

What this means for investors

Oil prices dropping more than 4% on a framework agreement, not even a signed deal, signals that traders had been pricing in continued disruption at a significant premium.

The $12 billion to $25 billion in potentially unfrozen assets is worth watching closely, as that capital could re-enter global financial markets if released.

The biggest risk is the gap between the announcement and Iranian officials’ characterization of it. The 2015 JCPOA, which took years to negotiate, survived barely three years before being abandoned.