Hours after posting that the US would hit Iran "VERY HARD TONIGHT," Trump canceled the strikes. His Thursday evening announcement: "Based on the fact that discussions with the Islamic Republic of Iran have been brought to the highest level of Iranian leadership and approved, I have, as President of the United States of America, cancelled the scheduled strikes and bombings against Iran this evening." From the Oval Office he told reporters, "We just made a great settlement of the war with Iran."
On Friday, Pakistani Prime Minister Shehbaz Sharif announced that "a final, agreed upon text" of the US-Iran peace deal has been reached. "Peace has never been this close as it is now," he said, adding that Pakistan is working with both sides to finalize next steps.
Oil finally broke out of its trance, downward. Brent crude fell 4 to 5 percent toward the $87 to $90 range, depending on the source, an eight-week low. WTI dropped to the mid-$80s, with intraday prints as low as roughly $83. The national average gasoline price fell to $4.11 per gallon. A market that closed flat through Thursday's ceasefire collapse moved harder on Friday's peace text than it had on any single day of the war's escalation.
Yesterday this column wrote that the market had stopped believing in endings. It believed this one within hours. Whether it is right to is the question the next 72 hours will answer.
What Is Actually Agreed
The reported terms, per a senior US administration official: a memorandum of understanding that reopens the Strait of Hormuz immediately and without tolls, extends the ceasefire 60 days including Lebanon, ties sanctions relief to compliance, and removes Iran's enriched uranium from the country for destruction. The Pentagon is reportedly planning contingencies for securing the uranium stockpiles. Trump said a signing could happen this weekend in Europe, with Vice President Vance attending. A senior official put US confidence at "80 to 85 percent," explicitly not 100.
Israel is not a party to the MOU, but Netanyahu's office said Trump promised the final deal includes removal of enriched material, dismantling of enrichment infrastructure, missile production limits, and an end to proxy support.
The word doing the most work in all of this is "agreed." Iran has not signed. Foreign Ministry spokesman Esmail Baghaei called reports of a finalized agreement "merely speculation" on Thursday and said Friday that Iran is in the "final stages of internal deliberations." Foreign Minister Araghchi said the accord "has never been closer" while telling media to stop speculating about its contents. Asked directly whether Supreme Leader Mojtaba Khamenei has personally approved, a US official said only that Iranian officials "attested that the supreme leader is comfortable with where we are." That is not a signature.
The Two Sides Are Already Disputing the Text
The clearest warning sign is that Washington and Tehran are describing different documents.
The US version has Hormuz reopening immediately upon signing. Iran's semi-official Mehr News described a 14-point draft in which oil sanctions are lifted and Hormuz reopens within 30 days. Those are materially different deals: an immediate reopening starts supply normalization this month, while a 30-day phased version gives Tehran a month of leverage and optionality. Trump pushed back Friday morning, posting that Iranian media's portrayal had "NOTHING to do with the terms that were agreed to, in writing."
Two parties announcing an agreed text while publicly contradicting each other on its central term is exactly how the last three near-deals of this war died. The prediction markets reflect the skepticism: as of Thursday, a permanent peace deal by June 15 was priced at 9 percent, against the administration's 80 to 85. One of those numbers is very wrong.
The Shooting Has Not Actually Stopped
Friday morning, while the peace text dominated headlines, Iranian forces fired toward a tanker transiting Hormuz "without permission," and US forces shot down two Iranian one-way attack drones after attempted strikes on commercial vessels. The shoot-on-sight closure Iran declared on Wednesday technically remains in force until a deal is signed. A US defense official said traffic through the strait continues.
And there is a story from Wednesday that deserves more attention than it has received. US forces fired precision munitions into the engine room of the Palau-flagged tanker M/T Settebello in the Gulf of Oman for attempting to transport Iranian oil through the blockade. Three Indian mariners were killed, the first confirmed seafarer deaths of the US blockade. It was the eighth US enforcement action against vessels deemed non-compliant and the third tanker disabled that week. The International Maritime Organization called the targeting of seafarers "unacceptable," and the UN warned of widening fallout. The first civilian sailors killed in the blockade era died by American fire, not Iranian, in the same week the two governments agreed on a peace text. India, which lost a national at Kuwait airport last week, has now lost four citizens to this conflict in nine days.
Why the Market Believed This One
After months of "days away" claims that slipped, the market moved 4 to 5 percent on this one. Three things distinguish it.
The strike cancellation was a costly signal. Trump publicly threatened a third strike round and then publicly reversed himself, attributing the reversal to Iranian approval at the highest level. Walking back a stated military action is politically expensive in a way that another optimistic tweet is not, and markets weight costly signals more heavily than cheap ones.
The mediator went on the record. Pakistan's prime minister putting his name on "a final, agreed upon text" is a different category of confirmation than anonymous officials describing progress. Mediators do not typically announce texts that do not exist.
And the trade was positioned for it. Oil had spent two weeks failing to rally on escalation. A market that cannot go up on war headlines is a market looking for an excuse to go down, and Friday provided one. The eight-week-low close is partly the deal and partly the unwinding of a risk premium that had been eroding for days.
What Happens If It Signs, and If It Does Not
If the signing happens this weekend, the path is the one this column has described for a month: mine clearing begins, the blockade lifts proportionally, and the latent surplus OPEC+ built through four quota hikes starts arriving into a market that has already fallen 20 percent from its highs. Rystad's shortage-to-surplus flip plays out, and the next debate becomes how far below $80 the unwind runs.
If it does not sign, the failure mode is visible in advance: the 30-day versus immediate dispute, Iran's unfinished "internal deliberations," or a blockade incident like the Settebello becoming Tehran's reason to walk. A collapse from this height, with the market now positioned for peace, would produce the violent upside reversal that Thursday's escalation could not.
The war has been one week from ending for four months. This is the first week the paperwork agrees. The signatures are still the only fact that will count.
This article is for informational purposes only and does not constitute financial or investment advice. Oil market conditions can change rapidly. Consult a qualified financial professional before making investment decisions.