US and Iran sign peace protocol, Strait of Hormuz tolls loom after 60-day window
Presidents of the United States and Iran signed the Islamabad memorandum remotely on Wednesday, ending a months-long war and pledging to dilute Iran’s enriched uranium, while Tehran insists it will impose tolls on shipping through the Strait of Hormuz after a 60-day grace period.
The remote signing
On Wednesday evening, 17 June, the US and Iranian presidents each signed the so-called “Islamabad memorandum” remotely, finalising the protocol that commits Tehran to dilute its enriched uranium in future talks, while Washington agrees to lift economic sanctions. The virtual ceremony replaced an earlier plan for an in-person meeting in Geneva on Friday. The White House hailed the deal as a “major victory” on Iran’s nuclear programme, though controversy persists over financial incentives offered to end the months-long war that began in late February.
Iran’s nuclear pledge and sanctions relief
The core of the protocol is Iran’s obligation to dilute its enriched uranium stockpile as part of a broader negotiation process, in return for the removal of US sanctions. The text, unveiled by both sides on Wednesday, outlines a framework but leaves the details of the final, binding agreement to subsequent negotiations. The White House frames this as a significant rollback of Iran’s nuclear advances, while Tehran insists the accord preserves its rights under international law.
Control of the Strait of Hormuz
A sharp point of tension is the status of the strategic waterway. Under the protocol, Iran “will make best efforts to ensure safe passage of commercial ships without charge for 60 days only.” After that grace period, Iran will impose service fees on all vessels. Mohammad Bagher Ghalibaf, Iran’s chief negotiator, said bluntly in a state television interview:
The strait will not return to the pre-war situation. Iran has sovereignty over Hormuz and, of course, we will collect a toll for these services.
The Strait’s closure since February has throttled global trade and energy supplies; the imposition of tolls promises to reshape maritime economics even after full reopening.
- Iran closes the Strait of Hormuz, sparking a global energy crisis
- Three Iranian tankers leave Chabahar port, resuming oil exports to Asia
- US and Iranian presidents sign the Islamabad protocol remotely
- 60-day free-passage period for commercial vessels through the Strait begins
- Iran to start collecting tolls from ships transiting the Strait
Early oil exports and market swings
Even before the ink was dry, three Iranian tankers left the port of Chabahar this week, bound for Asian markets, signalling Tehran’s readiness to resume crude sales. Meanwhile, oil prices briefly surged 5% on Wednesday as traders weighed the agreement’s implications and the uncertainty over the Strait’s future toll regime. The reopening is expected to restore some supply, but the added cost of Iranian fees may keep a risk premium baked into global oil benchmarks.
France steps in to clear the waters
France has announced it is prepared to start demining the Strait of Hormuz, the first practical step toward safe navigation. Paris, however, has not yet seen the final text of the US-Iran protocol and notes the document “inevitably contains its share of ambiguity.” The demining mission, a prelude to the full commercial reopening, underscores the international community’s stake in the waterway and the complex choreography required to unwind a war that has jolted the world economy.
