US and Iran Agree to Halt Attacking Each Other Ahead of Talks

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(Bloomberg) — The US and Iran have agreed to stop attacking each other before peace talks resume this week over the Strait of Hormuz and other issues, paving the way to end days of tit-for-tat attacks that tested a fragile truce. 

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A US official who spoke on condition of anonymity said technical talks are scheduled to continue on all aspects of a memorandum of understanding reached this month, adding that both sides will stand down for now and vessels can move freely.

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The exchange of attacks began Thursday over the waterway through which a fifth of the world’s oil and gas once flowed, with the Islamic Republic striking a container ship. This prompted Washington to hit Iran the following day. The US struck again overnight Saturday after Tehran attacked a vessel carrying Qatari oil. Both sides blamed the other for breaching the ceasefire.

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The violence ratcheted up tensions in the wake of this month’s interim US-Iran peace deal and risks slowing progress toward restoring traffic through the vital strait to prewar levels. Talks over the details of the interim agreement were expected to resume this week in Doha. 

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US equity-index futures climbed after reports that the US and Iran backed away from a fresh escalation. A sense of caution prevailed in energy markets as Brent crude jumped as much as 1.9% to over $73 a barrel before paring gains to trade around $72.40.

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In the latest barrage on Sunday, Iran’s Islamic Revolutionary Guard Corps said it launched missiles and drones at the Ali Al Salem Air Base in Kuwait and the 5th Fleet naval base in Salman Port, Bahrain.

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Kuwait said it intercepted two missiles and there was no material damage or injuries. Bahrain reported a residential building had been hit, but said there were no fatalities. 

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The US said on Saturday it struck Iranian military sites.

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“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,” President Donald Trump said Saturday in a post on Truth Social after the latest strikes on Iran.

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The Joint Maritime Information Center on Saturday raised the security threat in the Strait of Hormuz to “substantial” after a tanker was struck and published a warning area for potential mines spanning much of the usual transit route. It also said the Omani route recommended by Western navies had been expanded to allow ships to transit in both directions simultaneously.

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Several vessels were crossing early Sunday using both the designated Omani and Iranian routes.

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Tehran has repeatedly targeted Gulf states that host American military bases and thousands of troops since the US and Israel launched the war on Feb. 28.

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Separately, Israel said it destroyed Hezbollah underground infrastructure in southern Lebanon. It had agreed with Lebanon to a ceasefire, but Hezbollah, which the US has deemed a terror group and is Israel’s target in Lebanon, said the ceasefire was “void.” Iran has made Israel’s war with the Iran-supported Hezbollah a part of the interim deal, even though Israel was not a party to the agreement.

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The IRGC said on Sunday that based on an agreement now known as the Islamabad Memorandum of Understanding, “traffic control arrangements in the Strait of Hormuz are with Iran, and from now on, violating ships will be dealt with more strongly than before,” Press TV reported in a post on X.