U.S. and Iran Agree to Pause Hostilities in Strait of Hormuz After Weekend Clashes

The U.S. and Iran agreed Sunday to pause hostilities and allow commercial vessels to transit the Strait of Hormuz freely, following a weekend of military exchanges that threatened to derail negotiations aimed at ending their conflict.

"Technical talks are slated to continue on all areas of the MOU," a U.S. official told CNBC on Sunday. "Both sides will stand down for now and vessels can move freely."

The understanding follows renewed fighting over the weekend, after the United States struck Iranian military targets in response to Tehran's latest attacks on shipping in the strategically important waterway.

Iran's attacks prompted U.S. President Donald Trump on Sunday to again threaten Iran with annihilation.

"United States aircraft just struck Iranian missile and drone storage locations, and coastal radar sites, for violating the Cease Fire Agreement, AGAIN!," Trump wrote on Truth Social.

"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. If that happens, the Islamic Republic of Iran will no longer exist!" he added.

The U.S. military attacked a number of Iranian targets after a commercial tanker in the Strait of Hormuz was reported to have been struck by a projectile on Saturday. Iran's neighbors, Kuwait and Bahrain, also reported incoming missiles and drones overnight.

U.S. Central Command said early Sunday that fighter jets struck 10 Iranian military targets in and near the Strait of Hormuz in retaliation for a drone strike on the Panamanian-flagged tanker, the M/T Kiku. The vessel was transiting the strait with more than two million barrels of crude oil, CentCom said late Saturday.

Trump has repeatedly threatened to send Iran back to the "stone age."

In an April Truth Social post, Trump threatened "a whole civilization will die tonight" and raised the specter of nuclear war. "For Iran, the Clock is Ticking, and they better get moving, FAST, or there won't be anything left of them," Trump said in a post in May.

Iran said it struck U.S. military targets in Kuwait and Bahrain early Sunday following U.S. strikes on its coastal facilities.

Kuwait's army said its air defenses were "confronting hostile missile and drone attacks."

Bahrain's Ministry of Foreign Affairs condemned "the renewed Iranian aggression against its territory, targeting it again with a number of ballistic missiles and drones, in a dangerous escalation."

"What Tehran is doing is not a passing act, nor an isolated incident, but rather a deliberate approach and a systematic pattern of repeated aggression," Bahrain's statement added.

The United Arab Emirates and Qatar — which have both been repeatedly struck by Iranian projectiles — condemned Iran's attacks on Bahrain and Kuwait, describing them as violations of those countries' sovereignty and international law. Saudi Arabia also denounced Iran's attacks, "as well as against the security and freedom of navigation in the Strait of Hormuz."

Despite the barrage of attacks, Central Command said commercial vessel transits through the critical waterway continue.

Oil edged higher on Monday after renewed military strikes between the U.S. and Iran reignited concerns over crude supplies from the Middle East.

West Texas Intermediate futures rose 1.3% to $70.17 a barrel. International Brent climbed 0.78% to $72.55. WTI futures settled below $70 on Friday for the first time since Feb. 27 — the day before the start of the Iran war.

The fresh attacks come as the U.S. and Iran are supposed to be engaging in a 60-day ceasefire as they hold talks to end their war. But both have accused the other of violating their end of the agreement.

The U.S. military struck Iran on Friday after Trump accused the Islamic Republic of "foolish violation" of a ceasefire agreement by launching drone attacks at ships in the strait.

Iran on Thursday struck the Singapore-flagged cargo ship Ever Lovely in the strait off the coast of Oman, Central Command said in a post on X. The vessel continued on its way through the strait, a major thoroughfare for oil shipments.

The renewed attacks come more than a week after Trump and Iranian President Masoud Pezeshkian signed a memorandum of understanding aimed at developing a permanent peace deal to end the war between their two nations.