In a dramatic last-minute development that has reshaped the trajectory of the most dangerous international confrontation in years, the United States and Iran agreed to a two-week ceasefire on Tuesday 7 April 2026 — just hours before President Donald Trump’s self-imposed deadline for launching what he had threatened would be “massive” military strikes on Iranian infrastructure. The deal, brokered by Pakistan, halts six weeks of air strikes, missile exchanges, and naval confrontations that had threatened to drag the region into a far wider war.
How the Deal Was Reached
The breakthrough came after days of intense back-channel diplomacy, with Pakistan acting as the critical intermediary. Islamabad has maintained working relationships with both Washington and Tehran, making it uniquely placed to facilitate the proximity talks that ultimately produced a framework agreement. President Trump confirmed the deal in a post on Truth Social, saying Iran had presented what he called a “workable” 10-point proposal covering almost all of the major points of contention between the two countries.
Iran’s Supreme National Security Council confirmed acceptance of the ceasefire terms late on Tuesday evening, with reports suggesting Supreme Leader Khamenei signed off after receiving assurances about the scope of US nuclear-related demands. The agreement was reached with roughly 90 minutes to spare before Trump’s stated deadline.
Key Terms of the Ceasefire
- Iran will allow safe passage of commercial vessels through the Strait of Hormuz, coordinating with Iranian armed forces.
- The US and Israel will suspend offensive air and missile strikes on Iranian territory and proxy forces.
- A two-week negotiating window is open, with formal peace talks scheduled for Friday 10 April in Islamabad.
- US secondary tariffs of 50% on countries supplying Iran with weapons remain in place throughout.
Economic Impact of the Deal
The economic consequences of the six-week conflict had been severe. Iran’s closure of the Strait of Hormuz triggered what the US Energy Information Administration described as the largest oil supply shock in recorded history, sending crude prices to multi-year highs and US retail gasoline to $4.14 a gallon — the highest level since August 2022. News of the ceasefire produced an immediate positive market reaction, with oil prices falling and equity indices rising.
Airlines, logistics companies, and manufacturers across the world had faced mounting cost pressures, and several US carriers had already raised bag fees in response to higher jet fuel costs. The EIA cautioned, however, that fuel prices could continue rising for months even after the Strait fully reopens, as supply chains slowly normalise.
Peace Talks in Islamabad
Vice President JD Vance is expected to lead the US delegation at Friday’s Islamabad talks, signalling the seriousness with which the administration is approaching the negotiating process. Diplomatic analysts have described the talks as a necessary first step but caution that a comprehensive peace deal — addressing Iran’s nuclear programme, sanctions, and the status of proxy forces — could take many months to negotiate.
Trump’s Approach: Maximum Pressure
The ceasefire reflects Trump’s characteristic negotiating approach: extreme public threats followed by a deal struck at the last possible moment. Supporters argue this “madman theory” diplomacy was what ultimately forced Iran to engage seriously; critics counter that the approach brought the world dangerously close to catastrophic escalation. Either way, the outcome — however provisional — is being greeted with considerable relief by markets, allies, and the general public across the world.
International Reaction
The ceasefire was welcomed broadly. UN Secretary-General António Guterres called it “a critical de-escalation that the world has been waiting for.” UK Prime Minister Starmer flew to the Gulf on Wednesday to support the deal. Israel issued a more cautious statement, welcoming the pause while reserving the right to act in self-defence. European leaders expressed relief and pledged to support the Islamabad process through diplomatic engagement.