The United States and Iran appear to be edging toward a peace agreement that could end months of conflict and reopen one of the world’s most important shipping routes.
US President Donald Trump announced this week that a deal is “largely negotiated,” raising hopes that a ceasefire could be signed soon. The conflict, which began in February 2026 after US and Israeli strikes on Iranian military and nuclear sites, has caused major disruption to global oil supplies.
The proposed deal is expected to unfold in two stages. In the first, both sides would agree to a 60-day ceasefire and reopen the Strait of Hormuz, a narrow waterway between Iran and the Arabian Peninsula. The Strait is one of the busiest shipping lanes on Earth, and its closure has pushed up fuel prices worldwide. In the United States, petrol has been costing nearly $5 a gallon, the highest in four years.
In the second stage, both countries would negotiate over Iran’s nuclear programme. The US wants Iran to agree not to develop nuclear weapons, which Iran has denied it was doing.
The deal has been brokered with help from several countries, including Oman and Italy.
For New Zealand, higher global oil prices driven by the conflict have contributed to rising fuel and shipping costs, so an agreement could bring some relief for Kiwi families at the petrol pump.
The deal had not been officially signed as of Thursday, and some details were still being finalised.
