There is now every chance of preventing a prolonged energy shockpublished at 11:36 BST

11:36 BST

Faisal Islam
Economics editor

The caveats are accurate.

It is going to take time to fire up the engines of hundreds of tankers and ships locked in to the Gulf. It is going to take months to restart many damaged gas facilities in the region. It does depend on a fragile peace.

The more substantial point here, however, is that there is now every chance of avoiding a prolonged energy shock.

The world economy, and the UK economy, has already proven far more resilient than it would have been expected from a shock of this magnitude. It had never reached the extremes of what occurred when Russia invaded Ukraine four years ago.

Petrol prices, and fixed mortgage rates, had already started to fall. Domestic energy bills will still rise in July, but the much feared hike in October ahead of winter is now very much up for grabs.

Fears about the southern hemisphere sowing season having to use critically expensive fertilisers may now lessen, and help calm a feared food price shock. In the UK context, if sustained, inflation may not actually reach 4% as feared, a world away from double digit rates seen in 2022.

Fixed mortgage rates have started to fall alongside falls in global government borrowing costs, including in the UK, as markets anticipate the need for fewer interest rate rises.

The peace deal is fragile, but the assumption is that President Trump will want to avoid it flaring up again before the November mid-term elections.

While it will still take some time for any sense of normal to return to the world economy, after all long roller coaster of uncertainty, this is undoubtedly positive news for the economy and the cost of living in the UK and around the world

Lebanon:

• Pakistani Prime Minister Shehbaz Sharif, who has been acting as mediator, says the US and Iran "have declared the immediate and permanent termination of military operations on all fronts, including in Lebanon"
• We don't know if Israel and the Iran-backed armed group Hezbollah will go along with this
• Israel's defence minister says the IDF intends to stay in Lebanon while Iran calls for a "complete halt" to Israeli action in Lebanon

Strait of Hormuz:

• President Trump says the strait will be reopened and that "oil will flow on both ends again for the Region"
• Iranian state media says that one of the points included in the memorandum of understanding is the lifting of the US naval blockade of Iranian ports within 30 days
• The exact agreed upon timeline for the reopening remains unclear, as is the mechanism around how navigation in the strait will be managed going forward

Nuclear:

• Iranian state media reports that Tehran is committing not to produce nuclear weapons
• It also reports that there will be a period of 60 days during which the US and Iran will have to agree on how to destroy and remove nuclear material
• But we don't know what the restrictions on enrichment will be and what will specifically happen to the stockpile of highly enriched uranium Iran has now

Sanctions:

• We know there is likely to be some sort of relief on Iranian sanctions and its frozen assets
• We don't know the timings around sanctions relief, and whether it will take place before or after negotiations on a final deal

Tanker seen crossing Strait of Hormuz hours after deal announcedpublished at 11:00 BST

11:00 BST

By Shruti Menon

BBC Verify has been checking ship-tracking data which appears to show that at least one oil tanker has crossed the Strait of Hormuz following President Donald Trump's announcement of a deal between the US and Iran.

According to ship tracking website MarineTraffic, Maltese-flagged tanker Disha left Qatar's Ras Laffan port on 13 June carrying cargo.

Another ship, the Panamanian-flagged bulk carrier MDL Kamran, left Iran’s Bandar Imam Khomeini on 11 June and transited the strait yesterday.

Its location trackers were off while passing through the waterway and resumed transmitting after clearing the strait. The vessel is headed to Oman’s Shinas port.

There's still time for the US-Iran deal to fall apart ahead of Friday's signingpublished at 10:43 BST

10:43 BST

Anthony Zurcher
North America correspondent

Image source, AFP via Getty Images

The announcement of a deal to end hostilities between the US and Iran has provided Donald Trump with a very welcome birthday present – although it's wrapped in a fair measure of uncertainty.

In such high-stakes diplomatic agreements, success or failure usually hinges on the details. And here, the details are scarce.

US Vice-President JD Vance said in a Sunday evening interview with Fox News that Iran never possessing a nuclear weapon was "built into this agreement" and that the US will be able to verify compliance.

Yet questions remain over crucial issues including what the restrictions on enrichment will be and what should happen to the stockpile of highly enriched uranium Iran has now.

As if to underscore this point, Iran's Supreme National Security Council released a statement on Sunday saying that "final negotiations will be postponed until after the implementation of the other party's commitments under the memorandum".

What those commitments are - and how Iran interprets them - will help determine whether this deal sticks.

With several days to go before the official signing, Iran and the US have time to settle key details to ensure the deal's success - but there's also time for it to fall apart.

• Our North America correspondent has written a fuller analysis on the uncertainty of the US-Iran deal, which you can read here

Darin Selnick, the former deputy chief of staff to the US Defence Secretary Pete Hegseth, has told BBC Radio 4's Today programme that negotiations over Iran's uranium enrichment programme would be the "key thing" going forward.

Iran's Deputy Foreign Minister Gharibabadi has said he hopes the framework will be followed by a 60-day negotiating period during which resolutions on Tehran's nuclear programme will be discussed.

But Selnick says the US's "biggest concern" is now that Iran won't negotiate "seriously" how to "get rid of the nuclear programme", adding that that is not "going to be acceptable" to Washington.

"If the president feels that they’re doing that… he is likely to start military operations again," he adds.

Ghoncheh Habibiazad
Senior reporter, BBC Persian

Image source, AFP via Getty Images

Yesterday, Iran's Deputy Foreign Minister Kazem Gharibabadi spoke to Iranian state TV to confirm that the deal with the US had been finalised and the official signing will happen in Switzerland on Friday.

He reiterated Iran’s distrust of the US and said that the country will “monitor” the implementation of US commitments.

He claimed that threats last night by Iran against Israel and the US following Israel’s attack on Beirut “helped the process of finalising the text and resolving some of the issues”.

Gharibabadi said that Iran hopes the negotiations will conclude within a 60-day timeframe. He said ending all sanctions against Iran and resolutions against the country related to its nuclear programme will be among matters to be negotiated within the period.

He added that the issue of economic reconstruction following the war will also be negotiated during these 60 days.

Since news of a framework agreement between the US and Israel was announced, our correspondents have been providing their analysis.

While details are scarce and President Trump's "larger goals remain unrealised for now", the deal "should help alleviate, if not entirely remove" some of the economic strain the conflict has been causing, writes North America correspondent Anthony Zurcher.

Our State Department correspondent Tom Bateman says this deal was needed for both the US and Iran for economic reasons, but that sticking points remain, including how to "meaningfully agree" on key issues such as nuclear and sanctions relief.

BBC Persian reporter Ghoncheh Habibiazad has been looking into the reaction within Iran, and says this agreement is being framed as a victory for the country and defeat for the US and Israel.

There will be "a sense of relief" for Iran's Arab Gulf neighbours, writes our Global Affairs correspondent Sebastian Usher, with the UAE, Qatar and Saudi Arabia having been hit by Iranian missiles during the war - but questions remain over what happens with Lebanon.

There, some families have started heading back to their communities but people remain sceptical about the framework and what impact it will have on Israel's war against Hezbollah, writes Middle East correspondent Hugo Bachega.

Any measure of a "peace deal" will be seen in the long-term, according to Security correspondent Frank Gardner and whether the danger of Iran developing a nuclear weapon has really been reduced - as President Trump claims - or if hardliners within the country will try to race for a bomb.

And this initial agreement is "just a beginning", explains Chief North America correspondent Gary O'Donoghue with questions on issues including the Strait of Hormuz still lingering until the final text is made public.

Image source, Reuters

The Israel Defense Forces intends to maintain its presence in Lebanon without any time restraints, says Israel's Defence Minister Israel Katz.

• It follows the announcement of a framework deal between the US and Iran, brokered by Pakistani mediators who say the agreement stipulates that "military operations on all fronts, including in Lebanon" will end

In a statement written originally in Hebrew, Katz says Israel opposes IDF withdrawal from Lebanon despite "existing and expected pressures".

The defence minister says that, in agreement with Israeli Prime Minister Benjamin Netanyahu, the IDF will remain in "security zones" in Lebanon - as well as Syria and Gaza - "without time limit".

He says that "all terrorist infrastructures" will be destroyed in order to "protect Israel's borders", and that Israel has briefed its US counterparts on its position.

"If Iran attacks Israel due to the events in Lebanon — we will strike it with full force and clearly demonstrate the gap in power," Katz adds.

Iran's foreign minister Seyed Abbas Araghchi this morning has had phone calls with his counterparts in Turkey, Iraq and Egypt, according to a post on his Telegram.

In it, Araghchi says he discussed the need for a "complete halt" to Israeli attacks in Lebanon and referred to the US' responsibility for implementing the agreement.

Image source, EPA/ Shutterstock

Hugo Bachega
Middle East correspondent, reporting from Lebanon

Image source, Getty Images

Lebanon is, again, hoping that a deal between the US and Iran would mean an end to the war between Israel and the Iranian-backed armed group Hezbollah here.

The morning appears to be calm in the south of the country, where Israel has carried out frequent air strikes, but people seem to be reacting to the announcement of a truce with caution.

Still, some families are starting to return to their communities, despite warnings from the authorities that it is not safe. In a video that is being circulated online, a group of displaced residents arrived in their village and found an Israeli tank blocking a street.

Iran had insisted that any deal should also include Lebanon. This was crucial in strengthening Iran’s image among Hezbollah’s supporters, who have been deeply affected by the conflict, and in reinforcing Tehran’s influence in Lebanon.

This came despite attempts by the Lebanese government to separate the two arenas, to curb that influence and, as a result, isolate Hezbollah even more, with the goal of disarming it, still elusive.

For Lebanon, the war has been catastrophic.

More than 3,700 people have been killed; around 5% of its territory is under Israeli occupation and there is no timeline for any withdrawal; dozens of villages in the south have been destroyed and no-one knows who will pay for reconstruction, and one million people remain displaced, most of them Shia Muslims, which are the bulk of Hezbollah’s support base.

The Lebanese have reason to be sceptical. The ceasefire that ended the last war in 2024 did not bring peace. Israel continued to attack what it described as Hezbollah targets almost every day and many fear that, once the world’s attention moves away from the region, this could be their reality again.

Nick Edser
Business reporter

Stocks in Europe have opened higher as investors react to the framework deal between the US and Iran, with both Germany's Dax and France's Cac 40 share indexes up by about 1.7%.

In London, the FTSE 100 index rose 0.6%. The increase was smaller than elsewhere as shares in energy giants BP and Shell – two of the biggest companies in the FTSE 100 – were down about 4% on news of the lower oil price.

Earlier, Asian shares had surged, with Japan’s Nikkei 225 closing up 5%. Asian markets have seen more dramatic moves as many countries in the region are heavily reliant on the Middle East for oil and gas supplies.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, says global equity markets were “starting the week firmly on the front foot”.

He adds that the framework deal has “given investors a clear reason to dial back some of the geopolitical risk premium that has hung over markets”.

Image source, AFP via Getty Images

President Donald Trump announced on Truth Social that the Strait of Hormuz would open once the "deal" is signed on Friday, "for purposes of mine removal".

As we mentioned in the previous post, Tehran effectively shut the strait - the world's busiest oil shipping channel - after Israel-US strikes in Iran on 28 February.

It could be "weeks to months" for mines to be cleared in the Strait of Hormuz, a retired US Navy rear admiral has told the BBC Radio 4's Today programme.

Admiral Mark Montgomery, who is also a senior fellow at the Foundation for the Defence of Democracies, says this will involve identifying and clearing all the mines, "so that you can have unrestricted transit without US military, or allied military vessels around, looking out for mines and doing constant cue route clearances".

It could also take up to two months for the world to feel "full relief" from the restriction on oil exports once traffic resumes, he adds, though he said there could be some "obvious relief" within a week.

Image source, Getty

In the last hour, Keir Starmer said he hopes the framework agreed by the US and Iran will "restore freedom of navigation in the Strait of Hormuz".

Traffic in the strait has ground to a halt since late February and thousands of sailors have become trapped in the Gulf. About 20% of the world's oil and gas supplies are usually transported through the vital waterway.

The US military has been blockading Iranian ports since April and last week the US military struck three vessels in the strait, killing three Indian sailors.

As of yesterday, US Central Command (Centcom) said it had disabled nine vessels and redirected 142 more since the blockade began on April 13.

As our Chief North America Correspondent Gary O'Donoghue writes, the exact status of the strait upon a framework deal being agreed is something over which divergent views are apparent.

President Donald Trump said on Truth Social that a deal is "complete" and that the strait would reopen "upon the signing of the Deal on Friday".

Iranian semi-official state agency Mehr News has reported what it says are the draft details of a 14-point memorandum of understanding between the US and Iran, including the reopening of the strait within 30 days, "under Iranian arrangements".

Image source, Getty Images

Let us turn to Downing Street, where UK Prime Minister Keir Starmer is speaking to journalists.

Ahead of announcing a new policy on social media access for the under-16s, Starmer says: "Before I start on social media, I want first to welcome the breakthrough reached last night between the US and Iran.

"I congratulate President Trump, the mediators from Pakistan and Qatar, and all those involved."

The PM continues: "This is a hugely significant moment. We have long called for de-escalation and it is vital that all parties see this opportunity to secure stability in the region, and restore freedom of navigation in the Strait of Hormuz."

Starmer says this will "ease the economic pressures" on Britons and those around the world.

He says the UK will now work "closely with our partners to support this agreement and to ensure that it turns into a durable, lasting peace".

We've had more regional reaction, with Egypt welcoming the agreement between the US and Iran.

The Ministry of Foreign Affairs describes it as a "highly significant development" that will restore "security and stability" in the region and around the world.

Its statement says the deal follows months of efforts by regional and international partners and opens "a new chapter".

It adds that it hopes this will be "a major turning point" in creating "a supportive environment for peace" and addressing other issues in the Middle East.

Image source, EPA/Shutterstock

Israel is yet to officially comment on the framework agreement between the US and Iran, which was announced last night by Pakistan.

This morning, we've heard from far-right Israeli National Security Minister Itamar Ben-Gvir.

Criticising the deal between the US and Iran, he says: "We are not partners to this agreement that does not ensure our security, and it does not bind us in any way."

He adds Israel should not settle for anything less than "the dismantling of Hezbollah", urging a continuation of action against the armed Lebanese political group.

"Every launch of a drone, UAV, or missile toward Israel from Lebanon will lead to an Israeli strike in Dahiya," he adds.

Ben-Gvir has often criticised his own government and has had sanctions imposed on him by the UK and other countries for "repeated incitements of violence against Palestinian communities".

Image source, EPA/Shutterstock

Ursula von der Leyen, President of the European Union Commission, has welcomed the agreement but says "the priority now is its swift and full implementation by all parties".

Von der Leyen says there should be an "immediate reopening of the Strait of Hormuz", describing freedom of navigation as "essential for regional stability and the global economy".

She adds the framework deal opens the door to broader negotiations on peace and security in the Middle East.

"And of course there can be no peace in the Middle East while Lebanon is in flames. Once again Europe calls on all parties to respect Lebanon's sovereignty and territorial integrity and implement a genuine ceasefire," von der Leyen says.

Von der Leyen goes on to say that European leaders who will be at the G7 this week in France will discuss the issue.

Peter Hoskins
Business reporter, Singapore

Asian shares are sharply higher as investors welcome the framework deal.

Japan's benchmark Nikkei 225 share index is up by around 5%, while the Kospi in South Korea is 4.8% higher.

Stock markets in the region have been on a wild ride in recent months, with shares often rising or falling sharply in response to developments in the US-Israel war with Iran.

Asian economies have been hit particularly hard by the effective closure of the Strait of Hormuz as they are heavily reliant on the Middle East for their oil and gas supplies.

Image source, EPA Shutterstock

This morning, we've had more European reaction to news of the framework agreement between the US and Iran.

António Costa, President of the European Council, says he looks "forward to an end to this costly war".

Writing on X, he adds the "weapons must now fall silent and outstanding differences must be resolved by peaceful means".

The EU's foreign policy chief Kaja Kallas describes the framework deal as "a potential breakthrough".

She says the agreement can "give much needed space for deeper negotiations".

Image source, Getty Images

Last night, Pakistan's Prime Minister Shehbaz Sharif said the US and Iran "declared the immediate and permanent termination of military operations on all fronts, including in Lebanon".

He added an official signing ceremony would take place in Switzerland on 19 June - the statement in full.

US President Donald Trump said "The Deal with the Islamic Republic of Iran is now complete".

He also said in a post on Truth Social that he authorised "the toll free opening of the Strait of Hormuz", and the removal of the US blockade of Iran’s ports.

In a second post, he said the deal would "bring Peace and Security to the whole Region”, and that the opening of the strait would mean “oil will flow on both ends again for the Region, and the World".

Iran’s Deputy Foreign Minister Kazem Gharibabadi confirmed in a phone call on state TV that a deal with the US had been finalised and that the official signing would happen in Switzerland on Friday.

"An immediate and permanent end to the war and military operations on different fronts including Lebanon will be announced tonight," he said.

Iranian state media has been reporting what it says are the draft details of a 14-point memorandum of understanding between the US and Iran, although the specific points have not been officially confirmed by either country - read the full list here.