Ongoing diplomatic negotiations between the United States and Iran, centered on ending the 2026 conflict that began with U.S.-Israeli airstrikes in February, now drive the elevated probability assigned to no U.S. ground invasion before 2027. Recent developments include announcements of a near-final memorandum of understanding to reopen the Strait of Hormuz, lift blockades, and address nuclear issues through further talks, with a signing expected in mid-June 2026. Ceasefire arrangements since April, intermittent strikes, and mediation by Pakistan and others have shifted focus from military escalation to de-escalation, consistent with trader consensus reflected in current pricing. A full-scale invasion to control Iranian territory remains unlikely absent major reversal of these diplomatic tracks before year-end.