French President Emmanuel Macron hosted the ceremony shortly after the G7 summit, underlining France's role in encouraging dialogue between the parties.

The agreement takes immediate effect and launches a 60-day negotiation process, with a formal follow-up ceremony scheduled in Switzerland on 19 June. Officials said the initiative is designed to reduce regional tensions and support stability in global energy markets.

The memorandum includes the reopening of the Strait of Hormuz and the lifting of a US naval blockade as initial confidence-building measures. Iran has also agreed to place its stockpile of enriched uranium under United Nations supervision, while broader issues related to its nuclear programme and international sanctions will be addressed during the upcoming negotiations.

If successful, the process could pave the way for a reconstruction fund worth up to 300 billion dollars and allow Iran to resume oil exports. Financial markets responded positively to the announcement, with Brent crude falling 2.1 per cent to 77.87 dollars a barrel on 18 June, reflecting expectations of improved energy supplies and a reduction in geopolitical uncertainty.