When Trump wrote on Friday that he was heading to the White House Situation Room for a "final determination" of an Iran deal, the market didn't wait for details. Brent fell 5% — to $85.8 per barrel, WTI — to $83.2. A three-month low in a single trading session.
"The market is being driven by headlines again, as confidence grows that ultimately a deal will be reached and the strait will reopen"
Tamás Varga, analyst at PVM Oil Associates
Varga formulates it precisely: confidence that a deal will happen — not the deal itself. This is a difference the market is ignoring now, but one that could prove costly.
What is in the memorandum — and what is missing
The so-called Islamabad Declaration, which both sides are discussing as a basis for signing, contains specific but limited commitments. According to Iran's semi-official Tasnim agency and Al Jazeera, the document provides for:
- 30 days to clear mines and open the Strait of Hormuz — without transit fees, but Iran retains the right to charge a "service fee" from vessels;
- A 60-day extension of the ceasefire for negotiations on the nuclear program and sanctions;
- temporary US waiver of sanctions on Iranian oil during negotiations.
The nuclear issue is set aside. Iran's Foreign Ministry spokesman Esmail Baghaei directly stated: "At this stage, it has been decided that the nuclear issue will not be addressed". Iran retains its stockpiles of enriched uranium — approximately 440 kg — throughout the entire 60-day negotiation window.
The US, for its part, insists on "zero enrichment" or a 15-20 year moratorium. Iran has repeatedly rejected this position — and continues to insist on the right to enrich uranium.
Why the strait matters as a figure
The Strait of Hormuz is not merely geography. About 20% of global oil and gas supplies passed through it daily. After the strait's effective closure from February 28, according to EIA data, in the first quarter of 2026, oil flows through Hormuz fell 30% compared to the same period last year — to 14.6 million barrels per day.
May became the worst month for Brent since March 2020 — when oil was crashed by the COVID-19 pandemic. The decline exceeded 19% for the month. Even if Hormuz reopens within 30 days, analysts at Axios warn: energy markets will remain destabilized for months to come — infrastructure, vessel insurance and supply routes do not recover by a single decree.
Signature without a date
Trump and mediators announced the signing for Sunday. The Iranian side denied this. According to Reuters, Baghaei said that "signing within the next few days cannot be ruled out, but caution is needed" — a formulation that in diplomatic language means: nothing has been finally agreed.
The memorandum does not contain a publicly described verification mechanism: no clearance verification, no guarantees of sanctions reversal in case of failure, no third party with a monitoring mandate. Pakistan is acting as a mediator, but its role after the document is signed is undefined.
If within 30 days Iran does not begin actual mine clearing — rather than merely declaring its readiness — it will become clear whether Friday's market reaction was a price correction or another headline-driven mistake.
