The United States and Iran reached an 11th-hour cease-fire deal on Tuesday evening, hours after President Trump threatened to start wiping out Iran’s “whole civilization” if it did not allow commercial shipping to pass safely through the Strait of Hormuz.
Brent oil futures tumbled over 16%; Nasdaq futures up 2.44%; S&P 500 Eminis rise 2% on Iran’s response.
The agreement was announced by Mr. Trump in a post on social media hours after Pakistan, a mediator in the dispute, urged Mr. Trump to stand down from the 8 p.m. Eastern time deadline he had set for Iran to accede to his demands. Pakistan proposed that each side observe a two-week cease-fire, and that during that time Iran allow oil, gas and other vessels to proceed unmolested through the economically vital waterway.
The cease-fire buys both sides time to try reach a longer-term end to the war, which began at the end of February with the United States and Israel subjecting Iran to a withering military assault.
Mr. Trump said that the agreement was “subject to the Islamic Republic of Iran agreeing to the COMPLETE, IMMEDIATE, and SAFE OPENING of the Strait of Hormuz,” suggesting that Iran has not yet agreed to conditions. In the past, Iran has insisted it would open the Strait only in return for a complete peace agreement, guaranteeing no further attacks by the U.S. and Israel, but not a cease-fire.
Iran accepted Pakistan’s cease-fire proposal following frantic diplomatic efforts by Pakistan and last-minute intervention by China, a key ally, according to three Iranian officials. They said the cease-fire had been approved by the new supreme leader, Ayatollah Mojtaba Khamenei.
Earlier, as the day wore on, it was not clear whether an off-ramp would emerge from the talks. It was not even clear if there were talks.
At one point, with Mr. Trump threatening devastating strikes on power plants, bridges and other critical infrastructure — a possible war crime under international law — Iran stopped engaging in the indirect negotiations.
“A whole civilization will die tonight, never to be brought back again,” Mr. Trump warned earlier in the day, though he said he hoped “maybe something revolutionarily wonderful can happen.”
In the hours before the 8 p.m. deadline, the United States and Israel stepped up their attacks on Iran. All the while, the Pakistanis were reported to be redoubling their efforts to get a cease-fire.
In urging Mr. Trump to hold off, the country’s prime minister, Shehbaz Sharif, said on social media that diplomatic efforts were “progressing steadily, strongly and powerfully with the potential to lead to substantive results.” He also asked Iran to open the waterway for two weeks.
Iran’s ambassador to Pakistan said in a social media post on Tuesday evening that diplomacy to stop the war had taken a “step forward” from a “critical, sensitive stage.”
But as night fell in the Middle East, Iranians were bracing for the possibility of more strikes. Some formed human chains along bridges and around power plants across the country, videos and photographs posted by state and other local media showed. It’s unclear whether the demonstrations were spontaneous or planned by the government.