Reopening the Strait: How a Draft Tehran‑US Agreement Could Reshape Global Energy Flows

In late May, Iranian state television broadcast an unofficial draft of a U.S.–Iran memorandum that outlines a plan to restore shipping through the Strait of Hormuz to pre‑war levels within a month. The document, reportedly surfaced by Tehran’s media, calls for the U.S. to end its naval blockade and allow the strait to operate as an international waterway.

Key provisions include the unfreezing of approximately $24 billion of Iranian assets in staged releases, a withdrawal of U.S. naval forces from the vicinity of Iran’s ports, and a pledge that the U.S. would not impose new sanctions on Iranian maritime traffic. Iran, in turn, would reopen the strait to civilian vessels, subject to “Iranian arrangements” that critics argue could amount to transit tolls or political leverage.

The draft also touches on nuclear negotiations. While it refrains from setting fixed enrichment limits or citing a timeline for eliminating Iran’s stockpiles of highly enriched uranium, it promises future talks on the nuclear program. Many analysts see this as a “sanctions‑first, guarantees‑later” approach that leaves the core issue of Tehran’s nuclear ambitions unresolved.

Market reactions were swift. Within minutes of the announcement, Brent crude fell to about $90 a barrel from a recent high near $110, while West Texas Intermediate slipped to roughly $87. The volatility underscores how closely oil traders monitor the strait’s status, given that roughly one‑fifth of the world's hydrocarbons transit this narrow waterway.

Political fallout has been mixed. Republican lawmakers express concern that the draft bypasses concrete restrictions on Iran’s nuclear program, potentially setting a dangerous precedent. Some applaud the move as a necessary de‑escalation in a conflict that has escalated tensions across the Middle East and strained global supply chains.

Beyond the bilateral terms, the draft hints at a broader diplomatic package. President Trump has linked the agreement to the expansion of the Abraham Accords, urging Gulf states such as Saudi Arabia and Qatar to join these normalization agreements. The push reflects Washington’s strategy to strengthen Israel’s regional alliances, though the proposal has met with lukewarm responses from potential Gulf partners.

In the end, the proposed memorandum offers a short‑term relief for global maritime traffic and a temporary economic lift for Iran, but it stops short of addressing the long‑term security concerns tied to Iran’s nuclear ambitions. Whether Washington will accept a final deal that retains the right to enforce stricter guarantees remains uncertain, and hardliners on both sides could stall a truce that might otherwise bring stability to a war‑torn region.