A significant diplomatic breakthrough appears to be taking shape between the United States and Iran, with negotiators from both sides having drafted a 60-day memorandum of understanding to extend their fragile ceasefire and open formal discussions on Tehran's nuclear programme.

The agreement, however, still needs the final green light from US President Donald Trump before it can take effect, according to a report by Axios citing American administration officials.

Trump Taking Time to Decide

While broad terms of the draft MOU were largely finalised by Tuesday, the deal remains in a holding pattern pending presidential approval. According to a US official quoted by Axios, Trump was briefed on the details of the proposed arrangement by negotiators. "The president relayed to the mediators that he wants a couple of days to think about it," the official said.

American officials also claimed that Iranian negotiators signalled Tehran had secured the necessary clearances on its end and was prepared to proceed with signing, though Iran has made no public statement confirming this.

What the Draft Agreement Covers

The proposed memorandum is wide-ranging in scope. On the maritime front, the draft includes firm guarantees to restore normal shipping through the Strait of Hormuz, the critical waterway that Iran blocked within days of hostilities breaking out in late February. Under the terms being discussed, commercial vessels would be allowed to pass through the strait without restriction, tolls or interference.

Iran would also be required to clear all naval mines from the strait within 30 days of the agreement coming into force. In turn, the United States would begin scaling back its naval blockade gradually, in proportion to the restoration of commercial maritime traffic through the waterway.

On nuclear matters, the draft includes an Iranian commitment to not pursue nuclear weapons. The two sides are also expected to use the 60-day window to begin negotiations over the fate of Iran's stockpile of highly enriched uranium and the future scope of its enrichment activities.

As part of the broader discussions, Washington has reportedly agreed to put sanctions relief and the release of frozen Iranian assets on the table. The draft also envisions setting up a mechanism to facilitate the delivery of humanitarian aid and essential goods into Iran.

A Desperate Off-Ramp From a Deepening Crisis

The urgency behind the proposed agreement is hard to overstate. The International Energy Agency has described the fallout from the conflict as the largest supply disruption in the history of the global oil market, and the numbers bear that out.

When Iran shut the Strait of Hormuz on March 4, it effectively cut off a waterway that normally carries around 20 percent of the world's oil and liquefied natural gas supplies. Brent crude prices surged by over 60 percent in the aftermath, crossing 120 dollars per barrel at the peak. The blockade also knocked out nearly a million barrels per day of oil exports from Saudi Arabia, Iraq, the UAE and Kuwait in one stroke.

India Among the Hardest Hit

For India, the third-largest oil importer and consumer in the world, the war has triggered one of its most serious energy security crises in recent memory. Roughly half of India's crude oil imports have historically come from the West Asia region, with around 30 percent of that supply passing through the Strait of Hormuz. When the waterway closed, New Delhi found itself acutely exposed.

The economic pain translated quickly into domestic policy shifts. The Modi government was forced to end a four-year freeze on retail fuel prices, raising petrol and diesel rates four times over the last two weeks. Currency depreciation added to the strain, prompting Moody's Ratings to cut India's calendar-year GDP growth forecast by 0.8 percentage points, bringing it down to 6 percent.