Report: US and Iran Reach Framework to Open Hormuz Strait, Oil Prices Plummet Over 5%

The Washington Post reported that the United States and Iran have reached an agreement on a memorandum of understanding framework. According to the framework, the Strait of Hormuz is expected to fully resume navigation within 30 days after the signing of the agreement.

Citing an anonymous senior U.S. official, the report states that the framework primarily includes the following core terms: both sides agree to extend the ceasefire duration to 60 days, creating a window to reach a final agreement for a permanent cessation of hostile actions; demining operations in the Strait of Hormuz and a gradual resumption of navigation during the ceasefire; Iran's commitment to not develop nuclear weapons, with specific verification and enforcement mechanisms to be determined by both sides within the next two months.

It is worth noting that as of May 24th, the U.S. and Iran have not officially signed any agreement, and the aforementioned content remains at the stage of framework consensus.

Fox News quoted a U.S. official on the 24th, reporting that the framework agreement between the U.S. and Iran is currently "95% reached," with both sides reaching an agreement on Iran's "nuclear reserves" and the issue of the Strait of Hormuz, currently negotiating on "wording." The U.S. official denied the possibility of a quick agreement with Iran, stating, "We have not reached an agreement, nor will we sign one today or tomorrow." He speculated that President Trump might give the negotiators from both the U.S. and Iran 5 to 7 days to reach an agreement.

President Trump stated on social media on Sunday that the negotiations are "advancing in an orderly and constructive manner," and that his representatives are in no rush to reach an agreement because "time is on our side." Despite unresolved core differences such as the blockade of the Strait of Hormuz, the market has already factored in the expectation of geopolitical easing.

The global oil market experienced its largest drop in two weeks during the Asian trading sessions, with Brent crude and WTI crude falling by 5.5% and 5.8% respectively, to $97.83 and $90.96 per barrel.

Three Core Disputes, Deciding Whether the Agreement Can Be Implemented

Behind every term of the framework agreement, there are substantial fractures.

On the issue of the strait, Iran advocates that management rights after reopening should be "completely controlled by Iran," while the U.S. explicitly rejects any arrangement that allows Iran to impose tolls on transit vessels. On the nuclear issue, the U.S. seeks a 20-year ban on enriched uranium, while Iran is only willing to accept a short pause and insists on diluting high-enriched uranium domestically rather than exporting it. On the issue of asset unfreezing, Iran demands the immediate release of billions of dollars worth of frozen assets after the agreement is announced, with no commitment from the U.S. so far, which Iran characterizes as "touching the bottom line."

Rory Johnston, founder of the commodity research institute Commodity Context, warns that such principled consensus has historically been easy to break when entering the stage of detailed interpretation, and current progress should not be overinterpreted.

Even if an Agreement is Reached, the Supply Gap is Difficult to Quickly Fill

Amid falling oil prices, Jeff Currie, Chief Strategy Officer of the energy pathway business at Carlyle Group, issued a warning in Singapore with a contrary direction: The market should not harbor illusions of a quick recovery in supply.

Currie points out that global apparent inventory data is misleading— a large amount of stored crude oil is actually "bottom-of-the-barrel oil" needed to maintain the operation of pipelines and storage systems; the actual scale of mobile inventory available for market allocation is far less than the numbers on the books. Asia has already approached this "minimum operational inventory level," Europe may be next, and the U.S. could face shortage pressure before July.

Even if the Strait of Hormuz negotiations are successful and demining reopens, it will take considerable time to restore normal energy exports physically. Peaceful expectations can suppress oil prices within a day, but the rebuilding of inventory will not happen at the same speed.