US and Iran near peace deal as Pakistan says signing imminent

Pakistan said the US and Iran are on the verge of finalizing a peace deal to end the four-month war, with Prime Minister Shehbaz Sharif announcing the agreement could be signed within 24 hours — even as Tehran pushed back on the timeline and key terms remained unresolved.

"We are closer to a peace deal than ever before," Sharif said on X on Saturday, adding that Pakistan is preparing for an electronic signing ceremony followed by technical-level talks next week. US President Donald Trump separately asserted the deal would be "signed tomorrow" and that the Strait of Hormuz would reopen immediately after.

Iranian Foreign Ministry spokesperson Esmail Baghaei pushed back on the timing, telling state media the signing "will not happen tomorrow" but that "the likelihood of finalizing the memorandum of understanding in the coming days is high." Foreign Minister Abbas Araghchi, who has referred to the proposed accord as the "Islamabad memorandum of understanding," said on Friday that an agreement has "never been closer."

The conflicting timelines reflect deeper disagreements over the deal's substance. Trump said on Truth Social that the agreement would prevent Iran from enriching or procuring nuclear material and allow the US to "downblend and destroy" Iran's highly enriched uranium either in Iran or the US. Iran's foreign ministry countered that the current MOU is focused solely on ending the war and that "at this stage, it has been decided that there will be no discussion of the nuclear issue."

The Strait of Hormuz — which handles about 21 percent of global oil trade — remains a central flashpoint. Trump has repeatedly insisted the waterway must be open with no fees or Iranian management. Yet Iranian state media has emphasized that Iran would retain "management" of the strait under the MOU, with Iran and Oman jointly determining its future administration. Iranian forces continue to use coercive measures: US Central Command reported intercepting multiple Iranian drones targeting commercial vessels in the strait on June 12, and Iranian media reported warning shots fired near Qeshm and Sirik islands.

Economic terms are equally contested. Iran has pushed for early access to frozen assets, proposing the release of half its frozen funds upfront. Qatar reportedly proposed a $12 billion package including $6 billion in Iranian assets in Qatar for humanitarian use and a separate $6 billion credit line. Trump stated on June 13 that "no money will exchange hands," directly contradicting Iranian demands.

The war began on Feb. 28 with joint US-Israeli strikes on Iran following months of tensions over Iran's nuclear program and its support for proxy forces. A tenuous ceasefire has been in place since April 7, with Pakistan serving as the primary mediator. A round of talks in Islamabad in April ended after 21 hours without an agreement.

The internal dynamics within Iran's leadership add another layer of uncertainty. IRGC Commander Major General Ahmad Vahidi and his inner circle have pushed for maximalist demands, including Iranian control over the strait and upfront economic relief before any nuclear negotiations. The formal negotiating team led by Araghchi has clashed with this hardline faction, and mediators are reportedly engaging the two camps separately. The transition from Supreme Leader Ali Khamenei — killed in the opening strikes of the war — to his son Mojtaba has further fragmented decision-making in Tehran.

The last time the US and Iran reached a framework agreement — the 2015 Joint Comprehensive Plan of Action — oil markets repriced over several weeks as sanctions were gradually unwound. Brent crude fell about 12 percent in the three months after the JCPOA was announced. A similar dynamic could unfold if a deal is signed, though the current conflict's scale and the unresolved nuclear question make any comparison uncertain.

Trump is expected to discuss plans to demine the Strait of Hormuz with allies during next week's Group of Seven summit in France, a senior US administration official said. Britain and France have expressed interest in assisting with demining the waterway once the conflict is paused. Funeral ceremonies for Khamenei are scheduled for July 4-9, a period that could further complicate the political calendar in Tehran.

This article is for informational purposes only and does not constitute investment advice.