The Memorandum of Understanding between the United States and Iran, signed on June 17, is set to expire on Monday. The agreement aimed to bring an end to more than three months of war that had killed thousands and crippled commercial movement in the Gulf, especially oil and gas exports relied upon globally.
The MoU followed rare high-level talks hosted by Pakistan. It was meant to find a diplomatic solution to halt the war with Tehran, as well as conflict in Lebanon. The agreement declared the immediate and permanent termination of military operations and sought an end to conflict on all fronts. A "final deal" would be endorsed by the UN Security Council within 60 days, which could be extended by mutual consent.
The US was to end its naval blockade within 30 days, remove its forces from near Iran after the "final deal" was reached, and begin work on a reconstruction and development package for Iran of at least $300bn. Washington also agreed to terminate sanctions against Iran, issue waivers for Iranian oil exports, and allow Tehran access to frozen funds. In return, Iran was to clear mines from the Strait of Hormuz and allow ships to pass "with no charge" for 60 days.
However, much of the dispute since the agreement's signing has centered on more basic issues, such as whether it was a ceasefire or a more permanent agreement and what each side was supposed to do. The US has not fully lifted sanctions on Iran, and President Donald Trump has scoffed at the idea of paying Iran for reconstruction, suggesting instead that Tehran pay compensation to families of protesters it had killed "over the last 50 years" as well as "all the people they have killed and gravely wounded with their roadside bombs and many conflicts".
Reopening Hormuz has not materialized either, with Iranian and US officials continuing to insist their side controls the strait. The Pentagon said it had fired on a Panama-flagged cargo vessel in the strait because it "violated the US blockade against Iran."
The recent reshuffle in Iran's national security apparatus suggests a tougher stance in future talks and less willingness to back down, particularly on control of Hormuz. The former head of the IRGC, Mohsen Rezaee, was named as the new head of Iran's Supreme National Security Council.
Iranian officials said the US has "violated and suspended" all its commitments, and Tehran has "likewise suspended all our own commitments". Iranian Parliament Speaker Mohammad Galibaf told reporters that the concessions Iran won in the MoU were "a source of pride and victory".
"I can say with complete conviction that we truly emerged victorious in this war, both militarily and politically," he said.
As for the US, Trump announced plans to formally claim the waterway for the US. Treasury Secretary Scott Bessent also said that the US will apply measures that have "never been seen" on Iran.
But there are not many levers left for Trump to pull if he wants to exert more pressure on Tehran. US stocks of interceptor missiles have been depleted, its strategic oil reserves drained and key military hardware, including aircraft carriers, have been kept at sea months longer than planned, meaning the US has few military options left to try.
As for economic pressure, Tehran has shown it can inflict economic damage of its own by disrupting traffic transiting Hormuz. Iran is playing hardball here, clearly furious at the Trump administration for not fulfilling the MoU signed back in June, said Barbara Slavin, Distinguished Fellow at the Washington, DC-based Stimson Centre.
"Iran is making the international economy and they're making Donald Trump sweat," she said. One way or another, Iran would likely be reimbursed for the war and gain a great deal of control over the Strait of Hormuz, Slavin said.
This conflict resolves through a deal, probably after our midterm elections, when there will be less of an impact on the vote, Slavin added.
The expiration of the MoU has brought tensions to a head. Iran's Foreign Minister Abbas Araghchi said in a post on Telegram that "we have not yet made a decision to restart negotiations with the United States". Meanwhile, mediators from Qatar and Pakistan continued to exchange messages with Iran.
Iran was working on a separate agreement with Oman to hash out new shipping routes for the Strait of Hormuz, but emphasized that this was only possible if a political solution was reached. President Trump told supporters in New York that the US would soon claim the critically important waterway for itself.
Inevitably, Monday's expiration will mark a decisive moment in the ongoing conflict between the US and Iran. The question remains: what will come next?
Written by: Clark Fader | The Citizen Edition
“Impermanence is all there is.”