The US believes it’s close to an agreement with Iran to end the near 10-week war, Axios reported, as China added its voice to global diplomatic pressure to wrap up the conflict. Washington and Tehran are working on a one-page memorandum of understanding that would set a framework for more detailed nuclear negotiations, Axios said Wednesday, citing two US officials and two other sources it didn’t identify. Nothing has been agreed yet, the news agency added, and the US expects Iranian responses on several key points in the next 48 hours.
Iran hasn’t commented on any progress toward a deal.
Oil fell on the report, with Brent dropping 5.6% to below $104 a barrel, a two-week low on a closing basis. Global government bonds extended gains.News of the potential breakthrough came after US President Donald Trump suspended a military initiative to guide stranded ships though the Strait of Hormuz, after a single day of operations resulted in clashes with the Islamic Republic. That forced Washington to insist the a fragile ceasefire remains in place, and Beijing used a rare public comment on the conflict to warn against a return to fighting. “Project Freedom (The Movement of Ships through the Strait of Hormuz) will be paused for a short period of time to see whether or not the agreement can be finalized and signed,” Trump said in a social media post on Tuesday. “Great progress has been made toward a complete and final agreement with representatives of Iran.” Trump has repeatedly said significant progress has been made in negotiations with Iran to end the war, which began when the US and Israel started bombing the Islamic Republic in February. But disagreements remain over key issues such as the fate of Hormuz, where a fifth of the world’s oil and liquefied natural gas flowed before the war brought traffic to a standstill. The US is also demanding an end to Tehran’s nuclear enrichment program, a central part of a set of demands that Iran’s President Masoud Pezeshkian has called unrealistic. Trump’s challenge is to end an increasingly unpopular war while breaking Iran’s control of the strait, an objective he needs to achieve to lower energy costs. US gasoline prices topped $4.50 a gallon on Wednesday for the first time since July 2022, extending a climb that could hurt the Republican Party in the buildup to Midterm elections this November. Suspending Project Freedom also suggests he wants to avoid another flareup in violence like the one seen on the first day of the operation. Before Trump’s announcement, Secretary of State Marco Rubio told reporters at the White House that offensive operations against Iran were over. Project Freedom was meant to sit at the center of the next phase of the US approach to Iran. The US military said it helped two vessels exit Hormuz on Monday, repelling multiple attacks by Iranian drones, missiles and irregular navy fast-attack boats. The shipping industry is waiting for a way to guarantee safe passage through Hormuz without ships risking harassment by Iran or any other party, Dimitris Maniatis, the chief executive officer of Greek maritime risk company Marisks, told Bloomberg TV on Wednesday.
NN: Do not get caught up in the reality TV show game. Look at oil. Is oil coming through the straits… IF not all this talk is bullshit. Do not get shaken out of this great trade.