Strait of Hormuz to reopen on Friday as US-Iran sign peace framework

The United States and Iran have reached a consensus, agreeing to put a pause on the war that has halted shipping through the Strait of Hormuz as they prepare to sign a peace deal in Geneva, Switzerland, on June 19.

BusinessDay findings showed global oil prices have declined to their lowest since March, triggering a drop in ex-depot prices of premium motor spirit in Nigeria.

The agreement, confirmed by senior US officials and Iranian authorities, establishes a 60-day negotiation period to address key issues including Iran’s nuclear programme, sanctions relief, regional security, and the future operation of one of the world’s most important energy transit routes.

More findings showed oil markets are increasingly pricing in the prospect of improved crude supplies and reduced geopolitical risk in the Middle East.

According to US administration officials, President Donald Trump and vice president JD Vance signed the framework agreement electronically, while Mohammad Baqer Qalibaf, Iranian parliament speaker and chief negotiator, signed on behalf of Tehran.

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Officials said the memorandum would be formally signed during a ceremony scheduled for June 19 in Geneva, with the full text expected to be released publicly within days.

Both governments confirmed that an understanding had been reached, although negotiations on a permanent settlement will continue during 60 days outlined in the framework.

Iranian state media reported that the agreement contains provisions for discussions on nuclear matters and sanctions, while US officials maintained that preventing Iran from acquiring nuclear weapons remains a central objective of the arrangement.

Another major component of the framework is the reopening of the Strait of Hormuz, a critical shipping corridor through which roughly one-fifth of global oil and liquefied natural gas supplies typically pass.

The waterway was effectively disrupted following the escalation of conflict earlier this year, contributing to volatility in global energy markets and raising concerns over supply security.

US officials said maritime traffic through the strait is expected to increase significantly over the coming weeks. Current vessel movements are estimated at 25 ships per day, compared with roughly 140 daily crossings before the conflict.

Washington projects traffic could rise to between 40 and 50 ships by the end of this week, with the route expected to be fully operational by June 19.

The framework provides for toll-free passage through the strait during the initial 60-day implementation period. However, questions remain over the long-term structure of shipping fees.

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Esmail Baqaei, Iranian foreign ministry spokesman, said Tehran and Oman would coordinate navigation, environmental protection, insurance, and related maritime services.

While he stated that Iran does not intend to impose transit tolls, he indicated that fees could be charged for services provided within the shipping corridor.

The agreement has also generated debate over sanctions relief.

Reports citing Iranian officials suggested the deal could involve the release of up to $25 billion in frozen Iranian assets. However, US officials denied that any funds had been released, insisting that any sanctions relief would be phased and tied to verifiable commitments by Tehran.

Washington further stated that sanctions adjustments would depend on progress in nuclear negotiations and broader regional conduct.

Officials also clarified that the framework does not restrict Israel’s ability to respond to attacks from Iranian-backed groups and is not contingent on Israeli military withdrawals from Lebanon.

Meanwhile, Shehbaz Sharif, Pakistani prime minister, whose government has been involved in mediation efforts, described the arrangement as paving the way for an immediate end to military operations across multiple fronts.

Brent, the benchmark of Nigeria’s crude traded at $80.36 per barrel at 4pm Nigerian time, while West Texas Intermediate traded at $74.37 per barrel, signalling restored confidence in the reopening of the Strait of Hormuz.

Already in Nigeria, the Dangote Refinery has dropped ex-depot petrol prices by N75, bringing current prices to N1, 175 per litre, citing a de-escalation of the US-Iran war as a major driver of the decision.