U.S. and Iranian officials remain engaged in negotiations over an interim agreement to reopen the Strait of Hormuz, but expectations for an immediate breakthrough have weakened after Tehran publicly rejected Donald Trump’s claim that a deal was set to be signed Sunday.
Iranian officials said no agreement would be reached by the proposed deadline, and Supreme Leader Mojtaba Khamenei has yet to approve the latest draft of the memorandum of understanding. While both sides acknowledge negotiations have made significant progress and are closer to a deal than at any point since the April 8 ceasefire, several key issues including sanctions relief and frozen asset releases remain unresolved.
Complicating talks, an Israeli strike on Beirut targeting Hezbollah has raised the risk of a broader regional escalation. Iran has warned the attacks will not go unanswered and insists that any interim agreement with Washington must include a ceasefire in Lebanon.
Trade analysis
This is a meaningful setback for the June contract on the peace deal. While diplomacy remains alive, the failure to meet Trump’s expected signing timeline, along with renewed Israel–Hezbollah tensions, increases the probability of delays.
Bullish (YES) signals:
- Qatari mediation produces a compromise and Khamenei approves the MOU
- The Israel–Lebanon front stabilizes, removing a major obstacle to a broader ceasefire
Bearish (NO) signals:
- Khamenei refuses to approve the current draft or demands significant changes
- Israeli strikes and Iranian retaliation trigger renewed regional conflict, causing Tehran to suspend negotiations
The outlook for the June contract has turned far more uncertain. A deal remains plausible, and the continued presence of mediators suggests neither side has abandoned diplomacy. Market positioning is likely to become more volatile as these incidents highlight just how fragile the ceasefire has become. Our base case remains NO as long as the truce keeps cracking.