Oil and bunker update: Talks are moving forward
The major news this week was, of course, that Trump and Iran’s president, Masoud Pezeshkian, digitally signed the agreement between the US and Iran. The memorandum of understanding, MoU, is now officially in force. It contains 14 points, which can be read here with comments from CNN:
https://edition.cnn.com/2026/06/17/politics/us-iran-memo-annotated-intl-vis
With the agreement, a 60-day period began during which the details of the nuclear issue are to be clarified. Iran does, however, reconfirm that it will not buy or produce nuclear weapons, but will be allowed to have nuclear material for peaceful purposes.
For the energy and shipping markets, the most important point is that, as expected, the agreement includes the opening of the Strait of Hormuz and free passage through it. However, the agreement only guarantees free passage for 60 days. Iran promises the strait will be fully open in 30 days once the sea mines have been removed. A spokesperson for the Iranian foreign minister has already said that Iran and Oman will develop a mechanism “for the strait” (read: toll).
For its part, the US will remove its blockade of Iranian oil and lift all types of sanctions against Iran, including sanctions adopted by the UN Security Council. The US will issue temporary “sanction waivers” during the upcoming negotiation period, ensuring that Iran can sell oil freely in the market immediately. This also applies to banking transactions. The US will also release frozen funds, and a USD 300 billion fund will be established for reconstruction.
Finally, it is very important that the first point reads, “The United States of America and the Islamic Republic of Iran and their allies in the current war are signing this MOU to declare the immediate and permanent termination of military operations on all fronts, including in Lebanon, and undertake from now on not to initiate any war or any military operation against each other, and to refrain from the threat or use of force against each other, and ensuring the territorial integrity and sovereignty of Lebanon”.
It means that Israel and Hezbollah in Lebanon, which have not signed the MoU, are also a part of the agreement. Hence, if the US does not convince Israel to terminate the military operations in Lebanon or Iran does not control the Hezbollah they MoU may easily break down.
Most commentators assess that the agreement contains major concessions to Iran. This suggests that Trump's main objective has been to avoid higher oil prices ahead of the midterm elections in November. For the market, it shows that the risk of the war flaring up again is now lower. Trump has already stated that there is no “hard deadline” for the 60 days.
The MoU signing put renewed downward pressure on oil prices, with more tankers already passing through the Strait of Hormuz, and Brent fell as low as USD 77 on Thursday. However, the market seemed to be already “technically oversold”, and a ceasefire deal was largely priced in, limiting the downside potential.
Dramatic weekend ends far better than feared
After the MoU was signed, negotiations between Iran and the United States, with Qatar and Pakistan acting as mediators, started in Switzerland on Sunday. The talks ended late Sunday and went far better than feared after a very hectic weekend.
According to the statement issued by Qatar and Pakistan on Monday morning, the parties have agreed to establish a “high-level committee” and a roadmap to reach a final agreement within the 60-day deadline. Technical talks will continue throughout the week.
In addition, Iran and the United States, together with Lebanon, have agreed to establish a “deconfliction cell”, facilitated by the mediators.
Importantly, Iranian Foreign Minister Araghchi has reposted the statement, adding that the talks have made significant progress toward ending the war in Lebanon. He also wrote that the oil sanctions, together with the U.S. blockade, have been lifted, that part of Iran’s frozen funds has been released, and that the reconstruction plan for Iran has now been established.
