US and Iran agree to halt attacks, set June 30 Hormuz talks

The US and Iran agreed to halt all kinetic operations against each other and will convene in Doha on June 30, a US senior official said, after a ceasefire signed June 17 collapsed into tit-for-tat strikes that threatened to reopen the Strait of Hormuz crisis.

"We decided to stop all kinetic actions," a US senior official told Axios, using the military term for strikes and attacks. A second US official said hostilities would "temporarily" cease while technical talks proceed, adding that vessels can "freely transit" the Strait of Hormuz during the period.

The de-escalation sent S&P 500 futures up 0.5% and Nasdaq 100 futures 0.6% higher in late trading, while Brent crude edged up 0.4% to about $72.30 a barrel. The moves reversed some of the risk premium built since June 28, when Iran launched missiles at US facilities in Kuwait and Bahrain and the US struck 10 Iranian military targets near the Strait of Hormuz. The waterway handles about 20% of global oil trade, according to the US Energy Information Administration.

The agreement buys 60 days of breathing room under the original memorandum of understanding signed in Switzerland, but the core dispute — who controls passage through the Strait of Hormuz — remains unresolved. Iran's Foreign Minister Abbas Araghchi said on June 28 that the waterway would remain under Iranian oversight for 30 days, a claim Washington rejects. The failure to activate a planned US-Iran military hotline, agreed during last week's Swiss talks, directly contributed to the latest escalation, according to Axios.

How the Ceasefire Unraveled

The June 17 MoU gave Iran 60 days to arrange safe passage for commercial vessels through the Strait of Hormuz in exchange for US sanctions relief and the unfreezing of Iranian assets. But within 11 days, both sides accused each other of violations. Iran demanded vessels coordinate passage in advance, which Washington said breached the agreement. The US struck Iranian radar and surveillance sites after an Iranian drone hit the Panama-flagged tanker Kiku on June 27, carrying more than 2 million barrels of crude oil. Iran retaliated with ballistic missiles and drones targeting the US Ali Al Salem airbase in Kuwait and the US Fifth Fleet at Port Salman in Bahrain.

The last time the US and Iran exchanged direct strikes during a ceasefire was in the months following the February 28 US-Israeli strikes on Iran, which triggered the initial blockade of the Strait of Hormuz. That standoff pushed Brent above $82 a barrel in late June before diplomatic channels reopened.

Doha Talks and the Hotline Gap

The June 30 meeting in Qatar shifts the venue from Switzerland, where the original MoU was mediated. US technical team lead Nick Stewart is expected to attend, according to a US official and a person familiar with the planning. The agenda centers on restoring the hotline between US forces and Iran's Islamic Revolutionary Guard Corps, which was agreed in principle last week but never activated — a failure both sides now acknowledge as a proximate cause of the renewed fighting.

Qatar, which condemned the Iranian strikes on Bahrain and Kuwait as violations of sovereignty, is hosting the talks. Pakistan also served as a mediator in the initial ceasefire. Neither country has issued a formal statement confirming the June 30 meeting.

The relief rally in equity futures reflects investor conviction that neither side wants a full-scale war with US midterm elections approaching, said Shoji Hirakawa, chief global strategist at Tokio Marine Asset Management. "Investors see the skirmishes as temporary and don't expect escalation into another war," he said. Global stocks are on track for their best quarterly performance since 2020, supported by the US-Iran peace prospects and tech sector optimism, according to Bloomberg data.

Still, the risk premium in oil markets is unlikely to fully dissipate until the hotline is operational and vessels transit the Strait without incident. Brent's backwardation — a sign of tight supply — has narrowed but remains elevated. The next test comes June 30: if talks produce a functioning hotline, the 60-day ceasefire may hold. If not, the pattern of strike-and-retaliate could resume within days.

This article is for informational purposes only and does not constitute investment advice.