US-Iran War to End as Ceasefire Deal Reached, Oil Prices Drop 3%

The United States and Iran have received a two-stage framework to end hostilities that could see a ceasefire take effect on Monday, a source familiar with the matter said, a development that has already sent oil prices down over 3 percent on expectations of the Strait of Hormuz reopening.

"President Trump has an extraordinary national security team, including Vice President Vance, Secretary [of State Marco] Rubio, Special Envoy Witkoff, and Mr. Kushner, who are working together to see if a peace deal is possible," White House spokesperson Anna Kelly said.

The deal, reportedly dubbed the "Islamabad Accord," was brokered by Pakistan and proposes an immediate ceasefire and reopening of the critical shipping lane, followed by a 15 to 20-day period to finalize a comprehensive agreement. Brent crude futures fell 3.2% to $89.50 a barrel on the news, while West Texas Intermediate (WTI) crude dropped 3.5% to $84.70.

The agreement aims to de-escalate a conflict that has threatened to disrupt the flow of roughly 21% of the world's daily oil consumption that passes through the Strait of Hormuz. The final settlement is expected to include Iranian commitments on its nuclear program in exchange for sanctions relief, with final talks to be held in Islamabad.

Vance's Role in Backchannel Talks

Vice President JD Vance has been a key, though behind-the-scenes, player in the negotiations. He was in contact with Pakistan's army chief, Field Marshal Asim Munir, as the ceasefire proposal was being circulated, according to a source familiar with the talks. While special envoy Steve Witkoff and Jared Kushner are leading the negotiations, Vance is on standby to engage directly with Iranian officials if significant progress is made. President Trump publicly acknowledged his vice president's involvement, stating, "JD is involved in the dealing."

Framework for a Final Accord

The proposed two-phase deal begins with a 45-day ceasefire, as first reported by Axios, allowing for the immediate resumption of shipping through the Strait of Hormuz. This initial phase is designed to create a window for finalizing the broader "Islamabad Accord." The comprehensive settlement is expected to address core issues, including curbs on Iran's nuclear ambitions in return for the lifting of economic sanctions and the release of frozen assets. Despite the diplomatic push, two Pakistani sources indicated that Iran has not yet formally committed to the proposals.

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