United States forces shot down Iranian drones over the Strait of Hormuz on June 12, while behind the scenes, a peace deal was being finalized. The United States and Iran are close to ending their damaging war that began in 2026. Pakistan has been the main mediator. On June 12, Pakistani Prime Minister Shehbaz Sharif announced that both sides had agreed on the final text for a peace deal.
The war started on February 28, 2026, with strikes by the US and Israel on Iran. This conflict has significantly changed the region and the global economy. For over three months, Iran blocked the Strait of Hormuz, a vital waterway for global energy supplies. The war has also caused immense destruction in Iran, with estimated damages of $270 billion. This is almost as much as Iran's total economic output for 2026.
A proposed agreement includes the US releasing frozen Iranian money and ending sanctions on Iranian oil. In return, Iran would reopen the Strait of Hormuz. The deal also requires Iran to stop supporting regional groups and end its nuclear program. The International Atomic Energy Agency has reported that Iran has enough enriched uranium for several nuclear weapons. This has worried Israel, with Prime Minister Benjamin Netanyahu stating Iran will not have nuclear weapons while he is in office. Israel is urging the US not to release Iranian funds.
Despite the agreement on the text, the path to peace is uncertain. Recent fighting threatened to restart the full war. Public statements also show disagreements, with Iran suggesting it wants to continue enriching uranium, which US President Donald Trump called negotiating in bad faith. However, US Vice President JD Vance expressed optimism. The deal might be signed soon, possibly in Geneva, though Iran suggests a remote signing.