The United States and Iran have agreed to suspend their recent military exchanges around the Strait of Hormuz and resume negotiations to shore up a fragile ceasefire, even as the two sides remain sharply at odds over who holds authority over the critical waterway. The reported understanding, signalled on Sunday, 29 June, came after four days of retaliatory strikes that had stoked fears of a wider regional conflict.

The Reported Ceasefire Agreement

A US official, cited in multiple reports, said both countries had agreed to halt attacks in the Strait and allow commercial vessels to move freely. 'Both sides will stand down for now and vessels can move freely,' the official was quoted as saying. Technical discussions, according to reports, are set to continue on implementing the memorandum of understanding that underpins the ceasefire arrangement. Notably, Iran had yet to publicly confirm the reported understanding as of Sunday.

How the Escalation Unfolded

The recent flare-up was triggered by attacks on commercial vessels in the Strait of Hormuz. Washington blamed Tehran for the strikes and responded with hits on Iranian military infrastructure. Iran retaliated with missile and drone attacks targeting US military facilities in Bahrain and Kuwait, though US officials said the projectiles were intercepted or failed to reach their targets. This is among the most direct military confrontations between the two countries in years, raising the spectre of a broader Gulf crisis.

The Dispute Over Hormuz Authority

Iranian Foreign Minister Abbas Araghchi insisted on Sunday that Tehran alone holds responsibility for managing maritime traffic through the Strait under the memorandum signed with Washington earlier this month. 'Under the memorandum of understanding, no other entity or country has any responsibility in this regard,' Araghchi said at a news conference in Baghdad. He also warned that any attempt to create arrangements contrary to the agreement would 'complicate the situation, delay the return of normalcy' and postpone the reopening of the Strait.

Washington, however, maintains that freedom of navigation in the Strait is non-negotiable. US Ambassador to the United Nations Mike Waltz cautioned that Iran would face further consequences if attacks on commercial shipping resumed. 'If the Iranian regime thinks for a second that President Trump is going to sit by, stand by, while Iran continues to attack international shipping without a response, they're sadly mistaken,' Waltz said.

Trump's Warning to Tehran

President Donald Trump renewed his warning to Iran after authorising additional US strikes over the weekend. 'There may come a point when we are no longer able to be reasonable, and will be forced to militarily complete the job that we very successfully started,' Trump wrote on Truth Social, adding: 'If that happens, the Islamic Republic of Iran will no longer exist!' The statement represents one of Trump's most explicit threats to Tehran since the current standoff began.

Economic Impact and What Comes Next

The Strait of Hormuz is a strategic chokepoint through which roughly one-fifth of the world's seaborne oil trade normally passes. The recent violence briefly disrupted commercial traffic, and oil prices edged higher as investors monitored the security situation. Commercial shipping reportedly resumed cautiously following the reported agreement. Both countries are now expected to resume broader negotiations aimed at ending hostilities and addressing Iran's nuclear programme, with early discussions likely to focus on restoring normal shipping through the Strait.