US-Iran Truce Reopens Hormuz Talks and Sends Oil to a Three-Month Low

Leaders of the Group of Seven (G7), meeting in Évian-les-Bains, France, called a preliminary United States-Iran agreement a breakthrough and credited President Donald Trump. The provisional terms would extend the ceasefire for 60 days and reopen the Strait of Hormuz to all shipping, with Iran agreeing not to pursue a nuclear weapon and to neutralize its enriched uranium. The chief of the North Atlantic Treaty Organization (NATO), Mark Rutte, described the reopening of Hormuz as a major advance, even as Trump issued a rare public rebuke of Israel's tactics against Hezbollah in Lebanon.

The optimism is not shared everywhere. Israeli reporting in Globes said the country's military establishment regards the diplomatic framing as not sincere, that intelligence indicates Iran's supreme leader, Ayatollah Ali Khamenei, is not seeking a final deal, and that Iran has threatened a severe response if Israel does not halt strikes in southern Lebanon. The gap between G7 confidence and Israeli skepticism is the main uncertainty surrounding the agreement.

Markets responded to the changed supply outlook. Brent crude fell about 1.7 percent to 81.73 dollars a barrel and West Texas Intermediate dropped to about 79.20 dollars. The reopening will not happen immediately. Japan's Nippon Yusen told shareholders it still has ten freighters in the Persian Gulf and that the security situation is beyond what a private company can manage.