Commodities April 8, 2026

Last-minute two-week truce agreed between U.S. and Iran on condition Strait of Hormuz reopens

Washington and Tehran accept a temporary halt to attacks amid mediation from Pakistan as markets breathe a sigh of relief

By Ajmal Hussain
Last-minute two-week truce agreed between U.S. and Iran on condition Strait of Hormuz reopens

U.S. President Donald Trump accepted a two-week ceasefire with Iran hours before a threatened deadline to strike if Tehran did not reopen the Strait of Hormuz, conditioned on the waterway resuming oil and gas traffic. Pakistan helped broker the pause; Iran said it would halt counter-attacks and allow safe passage if attacks ceased. The arrangement has been portrayed differently by both sides and has produced immediate—but uncertain—market relief.

Key Points

  • A two-week ceasefire between the U.S. and Iran was agreed less than two hours before a U.S. deadline, and is conditioned on Iran reopening the Strait of Hormuz to oil and gas shipments - affecting global oil flows.
  • Pakistan mediated talks with involvement from Field Marshal Asim Munir and Prime Minister Shehbaz Sharif, who invited U.S. and Iranian delegations to Islamabad for further talks.
  • Markets responded with relief: oil prices fell, stocks rose and the dollar weakened, reflecting investor hopes that Strait of Hormuz traffic could resume; sectors most impacted include energy, shipping, and defense.

U.S. President Donald Trump agreed to a two-week ceasefire with Iran on Tuesday, less than two hours before his public deadline for Tehran to reopen the Strait of Hormuz or face sweeping attacks on civilian infrastructure. The decision marked a dramatic reversal from an earlier threat by the president that "a whole civilization will die tonight" if his demands were not met.

Pakistan played a mediating role in the late-stage negotiations. Field Marshal Asim Munir, Pakistan's military chief, and Prime Minister Shehbaz Sharif were reported to have helped facilitate the deal. Sharif said in a post on X that he had invited delegations from both Iran and the United States to meet in Islamabad on Friday.

Trump framed the agreement as contingent on Iran pausing its blockade of oil and gas shipments through the Strait of Hormuz - the narrow but critical shipping lane that typically handles about one-fifth of global oil shipments. Iranian Foreign Minister Abbas Araqchi said Tehran would stop counter-attacks and provide safe passage through the strait if attacks against it ceased.

Reacting on social media, the U.S. president wrote on Truth Social: "This will be a double sided CEASEFIRE! The reason for doing so is that we have already met and exceeded all Military objectives, and are very far along with a definitive Agreement concerning Longterm PEACE with Iran, and PEACE in the Middle East." He also told the French news agency AFP that the outcome represented a "total and complete victory." "Total and complete victory. 100 percent. No question about it," he said when asked if he was claiming a win with the ceasefire.

Iran's Supreme National Security Council described the agreement as a victory for Tehran, asserting that the United States had accepted Iran's conditions for ending hostilities. The contrasting characterizations underscore the political stakes for both capitals.


There were immediate signs of caution about whether the pause would hold. A source briefed on the talks said the U.S. side feared Iran might be using the two-week window to buy time, describing the arrangement as a "trust-building exercise." The same source conveyed wariness about the durability of the ceasefire.

Israel gave its formal support to suspending strikes on Iran for the two-week period, according to a statement from Prime Minister Benjamin Netanyahu's office. However, that statement noted the ceasefire did not apply to Lebanon, a point that appeared to contradict Prime Minister Sharif's earlier comments that the agreement included a cessation of Israel's campaign in Lebanon.

It was not immediately clear when the ceasefire would take full effect. Israeli media reported that it would begin once Iran reopened the strait and said Israeli authorities expected Iranian attacks to continue in the interim.


There were conflicting reports of continued hostilities even after the announcement. More than an hour after Trump declared the ceasefire, the Israeli military reported identifying missiles launched from Iran, and explosions from intercepted missiles were heard in Tel Aviv. Gulf states including Kuwait, Bahrain, Saudi Arabia and the United Arab Emirates issued near-simultaneous alerts and activated air defences.

In Israel, medical responders treated two 15-year-old males in mild condition for blast injuries in the southern town of Tel Sheva, the MDA ambulance service said. Israeli media reported that its military was striking back at launch sites in Iran, while Iraq's Islamic Resistance said it would suspend operations in Iraq and across the region for two weeks.

Trump said the two sides had made progress, with Iran presenting a 10-point proposal that he described as a "workable basis" for negotiations. He indicated he expected further agreement to be "finalised and consummated" during the two-week period. He later told AFP: "We have a 15 point transaction, of which most of those things have been agreed on. We'll see what happens. We'll see if it gets there."


Markets showed a swift response to the apparent easing of tensions. Oil prices fell, equities rose and the dollar weakened in Asian trading as traders reacted to the possibility that shipping through the Strait of Hormuz could resume. Global leaders also welcomed the ceasefire, and the Australian government said the longer the conflict continues the greater the negative impact on the world economy and the greater the human cost.

The conflict, now into its sixth week, has resulted in more than 5,000 deaths across nearly a dozen countries, including over 1,600 civilian fatalities in Iran, based on tallies from government sources and human rights groups. During the hours leading up to Trump’s deadline, U.S. and Israeli strikes had intensified on Iranian targets, hitting railway and road bridges, an airport and a petrochemical plant. U.S. forces also struck targets on Kharg Island, which hosts Iran's main oil export terminal.

The closure of the Strait of Hormuz had previously pushed oil prices sharply higher and raised the risk of a global economic slowdown or recession. The U.S. Energy Information Administration warned earlier on Tuesday that pump prices could continue to rise for months even after the strait was reopened.


Observers noted that domestic politics in the United States may have influenced the decision-making. With the U.S. midterm election campaign underway and Mr. Trump's approval ratings at historically low levels, analysts suggested the president may have been sensitive to the war's unpopularity among American voters and the economic pain from higher fuel costs.

One academic noted that the U.S. appears to be seeking a way to extricate its military involvement without framing it as a unilateral retreat, and that the two-week pause could be an attempt to secure an outcome that can be presented to domestic audiences as a form of victory. The source briefed on the talks, however, reiterated that the U.S. side remained cautious about Iran's intentions.


The day's events represented an abrupt turn from the president's earlier public warnings. His threat to destroy every bridge and power plant in Iran unless Tehran reopened the strait had prompted widespread condemnation from world leaders and concerns among international legal experts, some of whom said indiscriminate strikes on civilian infrastructure could amount to war crimes.

As the two-week pause takes effect under terms described by both sides, significant questions remain. The exact timing of any full implementation is unclear, reports indicated that attacks could continue until the strait is reopened, and key regional players issued mixed statements about the scope of the ceasefire. Markets reacted positively to the possibility of resumed shipping, but traders and officials will be monitoring developments closely as the temporary halt unfolds.

The coming days are likely to determine whether both sides can translate this fragile arrangement into a more durable agreement or whether the pause will merely be an interval in a broader and ongoing conflict.

Risks

  • The ceasefire's durability is uncertain - a source briefed on the talks said U.S. officials feared Iran might be buying time, indicating potential for renewed hostilities that would affect energy and defense sectors.
  • Reports indicated attacks could continue until the strait is reopened, and Israeli media said strikes might persist in the interim - creating continued risk for shipping, oil markets, and regional stability.
  • The closure of the Strait of Hormuz had already pushed oil prices higher and raised the prospect of a global economic downturn; fuel prices could remain elevated for months even after reopening, posing a risk to consumer spending and broader economic growth.

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