Iran and the US have agreed on a memorandum of understanding (MoU) to end the armed conflict which broke out between them on 28 February.
Announcing the breakthrough on 14 June, Pakistan's Prime Minister Shehbaz Sharif, whose nation has been mediating between the two sides, said that the US and Iran had declared "the immediate and permanent termination of military operations on all fronts, including in Lebanon", where Israel and the Iran-backed group Hezbollah have been fighting.
The MoU will extend a ceasefire, first implemented on 8 April, for another 60 days, during which the sides will negotiate details of a final agreement. The naval blockade of the Hormuz Strait is to be lifted.
Moody's Ratings, commenting on the credit implications of the US-Iran Memorandum of Understanding, said, “The memorandum of understanding to be signed between the US and Iran reportedly provides a 60-day ceasefire extension and free passage of shipping through the Strait of Hormuz, which are credit positive. It will however likely take some time to ensure maritime safety through the Strait, with negotiations on contentious issues and a long-term agreement still to come. A credible and durable de-escalation necessary for a return to pre-conflict levels of traffic and ample global energy supply will take longer, with credit conditions improving only gradually through the autumn.”