Iran-US Talks; Strait Closure
US and Iran to Hold Talks in Switzerland Sunday Amid Strait of Hormuz Closure
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The United States and Iran are set to meet Sunday in Bürgenstock, Switzerland, even as Tehran claims it has closed the Strait of Hormuz a second time — a move that sent oil prices surging 7% to $82 per barrel. AP News reports the talks will focus on hammering out details of an interim agreement to halt the 108-day war between the two countries.
Iran's joint military command says the closure is a response to continued Israeli airstrikes on Hezbollah in Lebanon, which Tehran calls a "clear breach" of the Islamabad Memorandum of Understanding signed just days ago. But U.S. Central Command fired back, saying 55 merchant ships carrying 17 million barrels of oil passed through the strait on Saturday without incident.
What the Islamabad Peace Deal Actually Says
On June 17, President Donald Trump and Iranian President Masoud Pezeshkian signed the Islamabad Memorandum of Understanding, a 14-point document meant to pause the fighting. The deal gave both sides a 60-day window to reach a final peace agreement, according to CBS News. Key terms include reopening the Strait of Hormuz toll-free, lifting the U.S. naval blockade, and down-blending roughly 440 kilograms of Iran's 60%-enriched uranium under UN oversight.
The deal also promises a $300 billion reconstruction fund for Iran, financed by regional partners. But experts at Chatham House warn the MoU is a "political undertaking" rather than a formal treaty. That means it rests entirely on good faith — and right now, both sides are accusing each other of breaking it.
Who Is Going to Switzerland and What They Want
Vice President JD Vance is leading the U.S. team. He told reporters his focus is to "make progress on the nuclear issue and the Lebanon ceasefire," according to Global News. Presidential envoys Steve Witkoff and Jared Kushner are already at the Bürgenstock Resort handling technical groundwork. Pakistan and Qatar are serving as mediators.
Iran is sending Parliamentary Speaker Mohammad Bagher Qalibaf alongside oil and central bank officials — a sign Tehran wants to talk sanctions relief fast. Foreign Minister Abbas Araghchi is also headed to Switzerland, AP News reports, with orders to demand the U.S. deliver on its MoU commitments. Pakistan's Prime Minister Shehbaz Sharif and Army Chief Field Marshal Asim Munir, who brokered the original deal, will also attend.
Oil Markets Rattle as Hormuz Dispute Deepens
The Strait of Hormuz carries 20 to 25% of the world's seaborne oil. Before the war, roughly 138 vessels passed through daily. That number has fallen to between 25 and 55 ships per day, according to tracking data from MarineTraffic. When Iran announced the new closure Saturday, Brent crude jumped immediately to $82 per barrel — a sharp rise from the $67 level seen before the conflict began.
The U.S. has cost taxpayers roughly $113.3 billion over the 108-day war, about $1 billion per day, according to the Iran War Cost Tracker cited by TIME. Analysts say even if a final deal is signed, gas prices could take months to come back down. The 60-day clock on the MoU expires in mid-August — a hard deadline that both sides know is approaching fast.
Trump's Warning and the Pressure on Both Sides
President Trump has not softened his tone. At the G7, he warned Iran: "If they don't behave, we'll go right back to dropping bombs right smack in the middle of their head," according to Military Times. He has also threatened to charge tolls on Hormuz traffic for U.S. "services rendered as the Guardian Angel" of the Middle East if no deal is reached.
Inside Iran, ultra-hardliners called the "Stability Front" say the talks amount to a green light for more aggression without a full Lebanon ceasefire. In the U.S., some MAGA hawks are reportedly "furious" over what they see as a lopsided deal. The Institute for the Study of War says Iran is using the Hormuz threat strategically — to limit U.S. pressure during the fragile 60-day negotiation window, according to ISW.
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