On May 24, American and Iranian negotiators reportedly reached a tentative 60-day memorandum of understanding that would extend the ceasefire between the two countries, reopen the Strait of Hormuz to commercial shipping, and restart nuclear talks, according to the Associated Press and the Washington Post, both citing senior administration officials. But as of late May 2026, President Trump has not signed it, and without that signature, the world’s most critical oil chokepoint remains largely inaccessible to routine commercial traffic.
The strait, a narrow channel between Iran and Oman, normally carries roughly one-fifth of the world’s daily oil supply, about 20 million barrels per day according to the U.S. Energy Information Administration. Routine commercial transits have been severely disrupted since the U.S.-Iran military confrontation escalated earlier this year, forcing tankers onto longer, costlier routes around the Cape of Good Hope and keeping global crude prices elevated well above pre-crisis levels.
What the tentative deal includes
Senior U.S. officials described the MOU as covering three tracks: a 60-day extension of the ceasefire that halted direct military strikes, a commitment to begin demining operations in and around the strait, and a fresh round of nuclear negotiations aimed at constraining Iran’s uranium enrichment program. The Washington Post reported that the agreement also envisions restoring prewar shipping traffic levels through Hormuz, though neither government has released the MOU’s full text or any technical annexes.
The deal was negotiated below the presidential level, meaning it reflects what diplomats believe is achievable, not necessarily what Trump will accept. A delayed or conditional signature could compress the effective negotiating window well below 60 days. The White House could also attach late conditions on Iranian ballistic missile activity, regional proxy forces, or International Atomic Energy Agency inspection access, any of which could provoke pushback from Tehran and stall the process before it starts.
The sanctions problem no one has solved yet
Even if Trump signs tomorrow, a separate legal obstacle blocks resumed shipping. The Treasury Department’s Office of Foreign Assets Control has designated what it calls the Persian Gulf Strait Authority, a body the U.S. says Iran created to impose illegitimate tolls on vessels transiting Hormuz. (Note: the linked Treasury press release does not specify a designation number or effective date for the PGSA action; readers should verify the details against Treasury’s full SDN list and press-release index.) Under that designation, any company, insurer, or port operator that makes payments to or cooperates with the PGSA risks exposure to U.S. sanctions.
That creates a direct collision with the MOU’s promise of restored traffic. Shipowners cannot route tankers through Hormuz if doing so requires interacting with a sanctioned entity. No general license, specific license, or interpretive guidance from OFAC has been publicly issued to carve out a safe path. Until Treasury clarifies the rules, insurers and charterers have little choice but to treat the PGSA sanctions as fully operative and structure contracts accordingly.
One plausible resolution would be a narrow, time-limited OFAC exemption covering non-PGSA transit fees during the 60-day window. But no U.S. official has confirmed that such a mechanism is under discussion, and the gap between diplomatic ambition and regulatory reality remains wide.
Iran has not confirmed the details
A notable asymmetry runs through the reporting: the operational commitments attributed to the MOU, including demining timelines and traffic-restoration targets, come almost entirely from U.S. sources. Iranian officials have not publicly endorsed those specifics. Tehran’s state media acknowledged the existence of talks but stopped short of confirming the framework Washington described.
That gap matters more than it might seem. If Iran’s reading of the agreement differs from the version U.S. officials are briefing to reporters, the 60-day clock could expire without the on-the-ground steps needed to make Hormuz safely navigable again. Previous rounds of U.S.-Iran diplomacy, most notably the 2015 Joint Comprehensive Plan of Action, showed how quickly divergent interpretations of a deal’s terms can erode implementation. The JCPOA ultimately collapsed after the U.S. withdrew in 2018, and the mutual distrust from that episode hangs over these talks.
Without on-the-record Iranian confirmation or a published text, the demining and shipping commitments should be understood as U.S. characterizations of a deal still in flux, not settled obligations.
Commercial planning is running behind the diplomacy
Global oil prices have remained volatile through May 2026. Brent crude, the international benchmark, has pulled back from the crisis highs reached during the peak of the military confrontation but remains well above pre-escalation levels. (Specific per-barrel figures are omitted here because real-time pricing shifts daily; readers should consult live Brent futures data for the most current numbers.) War-risk insurance premiums for tankers transiting the Persian Gulf have stayed elevated, adding millions of dollars per voyage to shipping costs and discouraging all but the most risk-tolerant operators from attempting the route.
Some shipowners have begun inserting contingency clauses into charter agreements that allow them to reroute or cancel voyages if OFAC guidance does not arrive before loading dates, according to industry reporting. That kind of contractual hedging signals that the commercial world is not treating the MOU as a done deal. Energy companies with upstream assets in the Gulf or downstream refining operations dependent on Middle Eastern crude face the same bind: they cannot commit capital to a reopened strait until the legal and political picture sharpens.
For traders and analysts trying to separate what is real from what is aspirational, the clearest guide is to look at what is legally in force right now. The PGSA sanctions and the existing ceasefire are operative facts. The 60-day MOU is a conditional framework that depends on a presidential signature, Iranian follow-through, and Treasury guidance that does not yet exist. Until all three materialize, the Strait of Hormuz remains largely closed for practical purposes, and the oil and gas market will keep pricing that reality in.
Triggers to watch before the 60-day window can open
The most immediate trigger is Trump’s decision. If he signs the MOU without major modifications, the 60-day clock starts and attention shifts to two questions: whether OFAC issues guidance enabling lawful transit, and whether Iranian military and naval forces begin verifiable demining operations.
Congressional reaction will also matter. Lawmakers from both parties have signaled interest in attaching conditions to any Iran deal, and a formal MOU could accelerate legislative efforts to codify sanctions or demand Senate review of any nuclear agreement under the Iran Nuclear Agreement Review Act.
If Trump delays, attaches new conditions, or declines to sign, the ceasefire’s durability becomes the central question. The current pause in hostilities has held without a formal extension mechanism, but both sides have kept military assets in the region, and the risk of miscalculation rises the longer the diplomatic vacuum persists. Gulf Arab states, particularly Saudi Arabia and the UAE, have publicly urged a resolution that restores shipping access, adding regional diplomatic pressure to the bilateral talks.
For anyone with exposure to energy markets, Gulf shipping, or Middle Eastern geopolitics, the next few weeks of June 2026 will determine whether this MOU becomes a genuine turning point or another false start in a confrontation that has already reshaped global oil flows.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
