The United States and Iran are edging towards a temporary agreement to halt their war as Tehran grapples with an escalating oil storage crisis caused by stalled crude exports and falling production.

Sources and officials told Reuters on Thursday that both countries were working on a short-term memorandum aimed at stopping the fighting and stabilising shipping through the Strait of Hormuz, while leaving more contentious issues for future negotiations.

Iran’s foreign ministry spokesperson said Tehran had yet to reach a conclusion on the proposed framework, which centres on a temporary arrangement rather than a comprehensive peace deal.

According to Reuters, the proposed plan would unfold in three stages, including formally ending the war, resolving the crisis in the Strait of Hormuz and launching a 30-day negotiation window for broader talks.

“Our priority is that they announce a permanent end to war, and the rest of the issues could be thrashed out once they get back to direct talks,” a senior Pakistani official involved in mediation between the two sides told Reuters.

Pakistan’s foreign ministry spokesperson, Tahir Andrabi, also expressed optimism about ongoing mediation efforts. “A simple answer would be that we expect an agreement sooner rather than later,” Andrabi said during a briefing in Islamabad.

US President Donald Trump has repeatedly expressed optimism over the prospects of a breakthrough since the conflict began on February 28 following US-Israeli strikes on Iran.

Meanwhile, Iran has reportedly cut oil production by about 400,000 barrels per day as exports slow and storage facilities approach capacity.

According to Oilprice.com, US Energy Secretary Chris Wright said the reduction was linked to Iran’s inability to export crude due to a US naval blockade in the Gulf.

“It looks like they’ve likely already cut back their production, maybe by 400,000 barrels a day,” Wright said in an interview on Thursday.

He added, “They’ll likely continue to ramp down their production as their storage fills and their inability to export oil.”

According to shipping data cited in the report, only a handful of vessels carrying Iranian crude left the Gulf of Oman between April 13 and 25, representing a drop of more than 80 per cent from March export levels.

The report said tankers were backing up while onshore storage facilities continued to fill up, forcing production cuts as unsold crude accumulates.

Oil prices hovered around $98 to $100 a barrel on Thursday, sustaining Wednesday’s slump from about $108.