Strait of Hormuz to open for 60 days, but long-term future still subject to negotiation

Washington: The Strait of Hormuz will be opened toll-free for 60 days under the unreleased peace agreement between the US and Iran, but its longer-term operation will be subject to negotiations, American officials said.

The matter is one of many unresolved issues to be worked through over the next two months after a deal to end the conflict was signed electronically on Sunday (US time) by President Donald Trump, Vice President JD Vance and Iran’s parliamentary speaker Mohammed Bagher Ghalibaf.

It is expected to be signed in person on Friday in Geneva, Switzerland, with both Vance and Ghalibaf to attend. The text has been kept secret, but American officials said it would be made public upon signing, or before.

Vance, who led negotiations on the American side, moved to clarify aspects of the deal on Monday as he combatted “propaganda” from hardliners in Iran being aired by state-affiliated media.

Specifically, he said it was not true that Iran would immediately receive $US24 billion ($34 billion) of its frozen assets, nor would American taxpayers tip in cash to help rebuild the country.

“Iran doesn’t get a dime of money unless they perform their obligations,” Vance told ABC’s Good Morning America. “The money that we’re talking about is fundamentally sanctions relief. Not a single dollar of American money will go to Iran.”

It was also untrue that Iran would receive $US300 billion in compensation, he said – though the agreement did envisage a large investment fund that Vance said would come from Gulf countries.

However, he acknowledged there were questions over the long-term operation of the Strait of Hormuz – the key shipping route linking the Persian Gulf to the Gulf of Oman, through which more than a fifth of the world’s oil supply usually transits.

“Our expectation is that the strait is going to be opened in a toll-free way for the long term. That’s the sort of thing we’re going to figure out in these technical negotiations,” Vance told CNBC television. “There are a lot of very important details to figure out.”

Meanwhile, Iran’s Fars news agency reported that Iran and Oman intended to impose service fees in the strait after the 60-day period, citing a press conference by foreign ministry spokesperson Esmail Baqaei on Monday.

On a conference call with reporters, senior US officials said the long-term future of the strait would be decided after broader talks involving regional partners.

“The memorandum is explicit – the strait will remain open and toll-free for 60 days,” a senior US official said. “Our expectation is that this principle will remain part of any final agreement.”

Another senior official said: “With regards to the end-state, there will be a regional dialogue around what will happen – there’s no tolls or charges during the time of this MOU.

“The goal here is to create a mechanism that makes it impossible that it will ever be closed again, and done in a way that obviously protects all the different interests in the region.”

Both officials noted that traffic in the strait was already increasing. One person said they expected the number of ships navigating the passage to immediately climb to 40 or 50 a day, and for it to be “fully open” by Friday.

Iranian President Masoud Pezeshkian described the memorandum of understanding as an important step towards stopping the war and beginning negotiations, noting a final agreement “has yet to take shape”.

Iran was prepared for all options, Pezeshkian said on X, and had learnt “not to submit to humiliation”. But if properly implemented, the deal would be a “document of pride” for Iran.

Trump, who left Washington immediately after hosting a UFC function at the White House, headed for a G7 meeting in France, told reporters in Evian it was unlikely he would stay in Europe to sign the deal in person.

He pledged that the text of the MOU would be made public “pretty soon”, though he indicated it may not be until after Friday’s ceremony. “I want it to be released because it’s a very powerful document,” Trump said.

On the conference call, senior officials said the text would demonstrate the US was prepared to release frozen Iranian assets, and relieve sanctions, and that some “small gestures” would be provided up front if Iran did the same.

They also spoke of how the American negotiators soured on Oman during the talks and cut them out of the process, with one person describing the Omani intermediaries as “very duplicitous” and acting for Iran.

Trump at one point threatened to bomb Oman if it tried to impose tolls in or around the Strait of Hormuz.

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