Economy May 24, 2026 01:13 AM

U.S. and Iran Close in on 60-Day Ceasefire Extension That Would Reopen Strait of Hormuz

Draft accord would allow free transit through the Hormuz, lift U.S. port blockade and permit Iran to resume unrestricted oil exports

By Maya Rios

U.S. and Iranian officials are reported to be nearing terms for a 60-day extension of the existing ceasefire that would reopen the Strait of Hormuz to commercial vessels, permit Iran to resume unrestricted oil sales, and establish a framework for talks on Iran's nuclear activities. The draft would remove mines from the waterway, allow toll-free transit, and see the United States lift a blockade and grant sanctions waivers, while Iran would make commitments on nuclear negotiations.

U.S. and Iran Close in on 60-Day Ceasefire Extension That Would Reopen Strait of Hormuz

Key Points

  • Agreement would extend the current ceasefire by 60 days and reopen the Strait of Hormuz to commercial shipping.
  • Under the draft, Iran would remove mines and vessels would transit the strait without tolls, while the U.S. would lift its blockade of Iranian ports and grant sanctions waivers allowing oil sales.
  • The draft includes Iranian commitments not to pursue nuclear weapons and to enter negotiations on suspending uranium enrichment and addressing the stockpile of highly enriched uranium. Sectors impacted include global energy markets, shipping, and commodities-sensitive industries.

U.S. and Iranian negotiators are close to finalizing an agreement to prolong the current ceasefire by 60 days and restore normal commercial traffic through the Strait of Hormuz, according to reporting based on U.S. official accounts. The proposed arrangement would allow Iran to resume unrestricted oil exports and create a limited window for expanded diplomatic engagement.

Under the draft terms, the waterway would remain open for the entire 60-day extension, with vessels permitted to transit without payment of tolls. Iran would remove naval mines it had placed in the strait, a step designed to re-establish secure shipping lanes for commercial traffic.

In exchange, the United States would lift its blockade of Iranian ports and provide sanctions waivers enabling Tehran to sell oil on global markets. The package is framed as reciprocal: reopening passage and lifting the blockade would be matched by Iranian commitments on nuclear constraints.

The draft agreement reportedly contains explicit pledges by Iran not to pursue nuclear weapons and to enter talks aimed at suspending its uranium enrichment activities. Negotiations contemplated under the draft would also address the disposition of Iran's stockpile of highly enriched uranium.

Officials representing Iran have given verbal assurances through mediators about the scope of concessions they would be willing to make concerning both enrichment and nuclear material, according to the reporting.

Proponents of the extension view it as a temporary but meaningful pause that would open a diplomatic channel between Washington and Tehran. The extra time would be used to pursue broader discussions that could include easing certain sanctions and the potential release of frozen Iranian assets.

The Strait of Hormuz is a vital chokepoint for global energy flows, handling roughly one-fifth of the world's oil shipments. Since the outbreak of hostilities, interruptions to traffic through the strait have heightened concerns about global energy supplies and contributed to inflationary pressures.

Officials in Washington did not immediately return requests for comment about the reported draft agreement.


Context and next steps

If enacted, the 60-day extension would preserve an open corridor for maritime commerce while the two sides pursue more comprehensive talks. The draft suggests steps aimed at reducing immediate risks to shipping and energy markets while initiating discussions on longer-term nuclear issues.

Limitations of reporting

Available reporting indicates verbal assurances from Iranian officials have been made through intermediaries, and the provisions remain in draft form pending final agreement by both sides. Questions remain about how detailed commitments on enrichment suspension and removal of highly enriched uranium would be implemented.

Risks

  • The draft remains subject to final approval; commitments are reported as verbal assurances through mediators and may change before formalization - this uncertainty affects energy and shipping markets.
  • Implementation details on suspending enrichment and removing highly enriched uranium are not specified in the reporting, leaving nuclear verification and compliance questions unresolved - this impacts geopolitical risk assessments.
  • Even with a 60-day extension, renewed hostilities or enforcement disputes could again disrupt traffic through the Strait of Hormuz, posing downside risks to global oil supply and inflation trends.

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