New Delhi, June 25 -- The world's most vital energy artery has reopened. The Strait of Hormuz-through which nearly one-fifth of global oil and gas supplies pass-has become the clearest sign that Washington and Tehran have stepped back from the brink. After three months of war that threatened to ignite a wider Middle Eastern conflict and destabilize the global economy, the United States and Iran formally signed a memorandum of understanding (MOU) in Switzerland on June 19. The agreement halts hostilities, restores freedom of navigation, and creates a diplomatic pathway toward addressing one of the most dangerous rivalries in international politics.

Even in a world accustomed to geopolitical surprises, the agreement is remarkable. Only wee...