Pakistan's Prime Minister Shehbaz Sharif announced on Friday that the United States and Iran have reached an agreement on the text of a peace deal aimed at de-escalating tensions in the Gulf region. Sharif stated on social media that Pakistan is now "working closely with both sides to finalise the next steps," confirming that "peace has never been this close as it is now."
Details of the Proposed Agreement
The reports of a potential deal follow US President Donald Trump's decision to call off threatened strikes on Thursday, with both nations indicating progress in ongoing discussions. A Western source cited by The Economic Times suggested that a Memorandum of Understanding (MoU) could be signed as early as Sunday, with Geneva as the likely venue. Iranian Foreign Minister Abbas Araghchi also hinted at progress, posting on X that an agreement "has never been closer," a sentiment shared by President Trump on his own social media.
Iran’s Mehr news agency reported that final negotiations for an MoU with the US would focus on nuclear and economic issues, specifically excluding Iran’s missile program. IRNA added that nuclear talks would commence within 60 days of the signing.
Unconfirmed Claims and Market Reaction
Despite Prime Minister Sharif's strong assertions, there has been no immediate reaction or official confirmation from either the White House or Iranian authorities regarding the alleged peace deal. US Vice President J.D. Vance cautioned against "a lot of fake information" circulating about a possible agreement, clarifying that Iran would only receive economic benefits upon fulfilling its obligations.
Meanwhile, crude oil prices experienced a significant decline, falling more than 3% on Saturday to their lowest in nearly two months. Brent futures dropped $3.05, or 3.37%, to $87.33 a barrel, while US West Texas Intermediate crude fell $2.83, or 3.23%, to $84.88. This market reaction was largely attributed to Trump's cancellation of new strikes on Iran, easing fears of a broader escalation following tit-for-tat attacks earlier in the week.
Strait of Hormuz Situation
Earlier in the week, Iran had threatened to close the Strait of Hormuz, a critical waterway through which a fifth of global oil and liquefied natural gas shipments typically pass. However, the US military confirmed on Friday that commercial ships continued to transit through the strait without incident.