US, Iran sign landmark accord to reopen Strait of Hormuz, lift naval blockade

KARACHI: Pakistan’s prime minister announced Thursday that the United States and Iran have electronically signed a landmark memorandum of understanding that will immediately reopen the Strait of Hormuz and lift a U.S. naval blockade, potentially defusing a conflict that has rattled global energy markets.

Prime Minister Shehbaz Sharif said the “Islamabad Memorandum of Understanding” was signed by the presidents of both countries and endorsed by him as mediator. The agreement, posted on Sharif’s X account, takes effect immediately.

“The signing of this agreement at the highest level of the respective governments demonstrates the commitment of both sides to a diplomatic resolution of the conflict,” Sharif wrote.

I am honoured to announce that the historic ‘Islamabad Memorandum of Understanding’ has been electronically signed today between the United States of America and the Islamic Republic of Iran. The Memorandum has been signed by honourable Presidents of both the countries and also…

— Shehbaz Sharif (@CMShehbaz) June 18, 2026

The pact, which aims to end hostilities that began Feb. 28 when the U.S. and Israel launched a war against Iran, also commits Washington to immediately waive oil sanctions that have crippled Iran’s economy, according to the text. Once a final agreement is reached on Iran’s nuclear program, the U.S. will facilitate the release of a $300 billion reconstruction fund backed by regional nations.

Sharif praised U.S. President Donald Trump for his “steadfast commitment to diplomacy,” saying the president’s preference for peaceful resolution helped avert “devastating consequences for the region and beyond.”

Trump signed the document during a candlelit dinner at the Palace of Versailles following a G7 summit, with French President Emmanuel Macron and other guests applauding, according to a video posted by a Trump aide.

“Just signed it,” Trump told reporters as he emerged from the palace.

🚨 President Donald J. Trump has SIGNED the Iran Memorandum of Understanding at Versailles in France. 🇺🇸 pic.twitter.com/JQ6qlbvFAF

— The White House (@WhiteHouse) June 17, 2026

Iranian Foreign Ministry spokesman Esmaeil Baqaei, quoted by the state news agency IRNA, confirmed the document “was finalised with the signatures of the presidents.”

Sharif also expressed appreciation to Iranian Supreme Leader Ayatollah Mojtaba Khamenei and President Masoud Pezeshkian for their “wisdom, foresight and statesmanship.”

He acknowledged the efforts of the Iranian negotiating team, including Parliament Speaker Mohammad Bagher Ghalibaf, Foreign Minister Abbas Araghchi and Interior Minister Eskandar Momeni, as well as the U.S. team, including Vice President JD Vance, Special Envoy Steve Witkoff and Jared Kushner.

The prime minister also thanked Qatar, Saudi Arabia, Turkiye and Egypt for their engagement, and made special mention of Pakistan’s Chief of Defence Forces Field Marshal Asim Munir, saying his “tireless efforts” were critical in facilitating the breakthrough.

The agreement had initially been scheduled for an in-person signing by Ghalibaf and Vance, but Iran said a formal ceremony was no longer necessary.

Iran had effectively shut down the Strait of Hormuz, a vital waterway for global oil shipments, after the U.S. and Israel launched their offensive. The U.S. responded by imposing a naval blockade on Iranian ports.

Sharif expressed hope the memorandum would serve as “an enduring foundation for greater understanding, mutual respect and shared prosperity for the entire region.”