President Donald Trump and Iranian President Masoud Pezeshkian signed a Memorandum of Understanding on Wednesday that would lift the U.S. naval blockade and reopen the Strait of Hormuz without tolls for 60 days. The deal, announced simultaneously in Washington and Tehran, is light on specifics—neither side released a full text or detailed enforcement mechanisms.
What the MOU actually says
The memorandum commits both governments to a two-month suspension of the blockade that has choked oil shipments through the strategic waterway since late last year. Under the terms, commercial vessels and tankers would be allowed to transit the strait without paying any fees to Iranian authorities or facing U.S. naval inspections. But the document runs just three pages and leaves critical questions unanswered: who monitors compliance, what happens if a ship is stopped, and whether the toll-free guarantee extends to vessels flagged by nations under U.S. sanctions.
Officials familiar with the talks described the MOU as a “confidence-building step” aimed at de-escalating tensions that have pushed global oil prices to multiyear highs. Neither leader held a press conference after the signing. A White House statement called it “a necessary pause,” while a Tehran readout said the agreement “restores Iran’s sovereign right to the waterway.”
Market reaction and prediction markets
Betting markets, which have tracked the crisis closely, reacted with skepticism. Polymarket’s “Yes” contract for a Strait of Hormuz reopening by midyear slipped to 14.5% within hours of the announcement—down from 18% the day before. Traders appeared to doubt that the 60-day window would hold, given the lack of enforcement language and both sides’ history of walking back similar pacts.
Oil futures edged lower in early trading but recovered by the close, suggesting the market is waiting for concrete movement rather than a signed document. The strait handles roughly a fifth of the world’s petroleum transit, and even a brief disruption can ripple through supply chains.
The 60-day clock and what comes next
The MOU takes effect at midnight Friday, giving both governments until late April to either extend, renegotiate, or abandon the arrangement. A joint monitoring committee is supposed to meet within two weeks, but the agreement does not specify who sits on it or what powers it has. That vagueness has drawn criticism from lawmakers in both countries.
In Washington, a bipartisan group of senators said they would hold a hearing on the deal next week, pressing the administration for details on how it plans to verify Iranian compliance. In Tehran, hardline factions called the MOU a surrender to U.S. pressure and vowed to block any extension.
For now, the strait remains under blockade. The next 48 hours will show whether naval patrols actually stand down—or whether the MOU turns out to be another piece of paper.
