US and Iran closing in on memorandum to end war, Pakistani source says

The United States and Iran are closing in on an agreement on a one-page memorandum to end the war in the Gulf, a source from mediator Pakistan familiar with the negotiations said.

The Pakistani source said a report earlier by the U.S. media outlet Axios on the proposed memorandum was accurate. The Axios report had cited two U.S. officials and two other sources familiar with the discussions.

“We will close this very soon. We are getting close,” the Pakistani source said. Last month Pakistan hosted the war’s only peace talks so far, and it has continued in that role of mediator, ferrying proposals between the sides.

Reports of the possible agreement to end the war caused global oil prices to plunge, with benchmark Brent crude futures falling more than 8% to around $100 a barrel LCOc1. Global share prices also leapt and bond yields fell on optimism of an end to a war that has disrupted energy supplies.

The White House, the State Department and Iranian officials contacted by Reuters did not immediately respond to requests for comment. U.S. news channel CNBC quoted a spokesperson from the Iranian foreign ministry as saying Tehran was evaluating a 14-point U.S. proposal.

Axios reported that the White House believed it was closing in on a one-page memorandum to end the war with Iran. The report came hours after U.S. President Donald Trump paused a three-day-old naval mission to reopen the Strait of Hormuz.

The Axios report said the U.S. expected Iranian responses on several key points in the next 48 hours.

Among other provisions, Axios said, the deal would involve Iran committing to a moratorium on nuclear enrichment, the U.S. agreeing to lift its sanctions and release billions of dollars in frozen Iranian funds, and both sides lifting restrictions around transit through the Strait of Hormuz.

14-POINT MEMORANDUM OF UNDERSTANDING

The one-page, 14-point memorandum of understanding was being negotiated between U.S. envoys Steve Witkoff and Jared Kushner and several Iranian officials, both directly and through mediators, Axios said.

In its current form, the memorandum would declare an end to the war in the region and the start of a 30-day period of negotiations on a detailed agreement to open the strait, limit Iran’s nuclear programme and lift U.S. sanctions, Axios added.

Iran’s restrictions on shipping through the strait and the U.S. naval blockade of Iran would be gradually lifted during that 30-day period, Axios said, citing one U.S. official who added that if the negotiations collapsed, U.S. forces would be able to restore the blockade or resume military action.

Earlier, Trump announced a pause to “Project Freedom”, a mission he announced on Sunday to guide ships through the blocked strait. The mission had failed to bring about any significant resumption of traffic through the waterway, while provoking a new wave of Iranian strikes on ships in the strait and on targets in neighbouring countries.

In the latest incident, a French shipping company reported on Wednesday that one of its container ships had been struck in the strait the previous day, and that injured crew had been evacuated.

In announcing he was pausing the mission, Trump cited “great progress” in negotiations with Iran, without giving further details.

“We have mutually agreed that, while the Blockade will remain in full force and effect, Project Freedom (The Movement of Ships through the Strait of Hormuz) will be paused for a short period of time to see whether or not the Agreement can be finalized and signed,” Trump wrote on social media.

Trump had launched the naval mission to guide ships through the strait after saying he was likely to reject Iran’s latest proposal. The Iranian offer, made last week, also contained 14 points.

It had called for setting aside discussion of nuclear issues until after the war ended and the shipping dispute was resolved.

In comments on a visit to China on Wednesday, Iran’s Foreign Minister Abbas Araqchi made no mention of Trump’s latest remarks, but said Tehran was holding out for “a fair and comprehensive agreement”.

STRAIT SHUT SINCE END OF FEBRUARY

Iran has effectively shut the strait to all shipping apart from its own since the United States and Israel launched the war on February 28. In April, Washington imposed its own separate blockade of Iranian ports.

Trump’s Project Freedom mission to use the U.S. Navy to open the strait failed to persuade merchant ships that it was safe, while provoking new attacks from Iran, which said it was expanding the area under its control to include swathes of the coastline of the United Arab Emirates, on the strait’s far side.

While the mission was in effect, Iranian drones and missiles hit several ships in and around the strait, including a South Korean cargo vessel that reported an explosion in its engine room.

Tehran also repeatedly struck targets in the UAE, including the only major Emirati oil port on the coast beyond the strait, which has allowed some exports without crossing through it.