After the air strikes launched by the United States and Israel on 28 February, Tehran retaliated by targeting Israeli and U.S. installations in the Gulf and by sealing the Strait of Hormuz. The closure has choked a route that previously carried roughly 20% of the world’s oil and liquefied natural gas creating sharp swings in energy prices and heightening political stakes ahead of the November congressional contests.
Iran’s week-long proposal anchored in the June MOU
Foreign Minister Abbas Araghchi announced at the United Nations that Tehran has submitted a concrete plan to the United States—delivered through Qatar—promising to reopen the strait within seven days if the “necessary conditions” outlined in the memorandum of understanding (MOU) signed on 18 June are honoured. He stressed that the decision now rests with Washington and that the required actions are already embedded in the 14-point agreement, which includes Iran’s pledge never to acquire a nuclear weapon and a mutual halt to hostilities on all fronts.
U.S. response and diplomatic back-channel activity
American officials, speaking to the BBC, acknowledged that “positive discussions” are under way through mediators, including talks on nuclear matters. Yet a senior U.S. voice also warned that America “is not in a rush”, citing its strong position in controlling the strait. President Donald Trump has recently threatened to “annihilate the Islamic Republic”, a rhetoric that Tehran rejected as incompatible with genuine peace. Meanwhile, Iranian President Masoud Pezeshkian told CBS News that the cease-fire would take effect the moment the United States accepts the terms, and that Iran would permit UN nuclear inspectors to operate on its soil.
Key provisions of the 18 June memorandum
The agreement, negotiated in Pakistan, sets out a framework for de-escalation: it demands an end to the U.S. naval blockade, promises sanctions relief, and obliges Iran to make “its best efforts” to secure safe passage for commercial vessels. It also calls for talks with Oman on future shipping arrangements and envisages the registration of a temporary route with the International Maritime Organization. Although the MOU initially succeeded in reducing hostilities, both sides resumed strikes within weeks, eroding the fragile calm.
Economic fallout and regional flashpoints
Data from Kpler shows a recent ten-day average of about 18 vessel transits per day through Hormuz, with daily counts dipping to as low as nine on certain occasions. The bottleneck has amplified the urgency for a resolution, especially as the Houthis—Iranian-aligned forces in Yemen—have intensified attacks on Saudi oil infrastructure via the Red Sea, seizing the port of Mokha and threatening the Bab al-Mandab chokepoint. Saudi Crown Prince Mohammed bin Salman has appealed to Washington for military assistance, and the Saudi-led coalition reported intercepting ballistic missiles and drones aimed at its territory.
Broader diplomatic landscape
Beyond the immediate Hormuz talks, Tehran has sought the backing of allies such as China which reportedly endorses the proposal, and it has engaged the United Kingdom’s foreign secretary, Ed Miliband in a first meeting in New York since the IRGC was designated a terrorist organisation. The British side reiterated its commitment to freedom of navigation while warning Iran about threats to Jewish communities. Simultaneously, Israel’s position remains a wildcard, as it may oppose any arrangement that grants Iran a decisive role in controlling a vital maritime artery.
Outlook as election pressure mounts
Trump’s statements at the UN General Assembly suggested that a final settlement could materialise only after the November vote, framing the choice as “deal or annihilation”. Iranian officials, however, have rejected coercion, insisting that “peace cannot be built through threats of annihilation”. With the United States weighing the cost of lifting sanctions, ending the Lebanon front, and possibly renegotiating navigation fees, the next few weeks could determine whether the strait reopens swiftly or remains a strategic lever in a broader geopolitical contest.
