The resumption of hostilities between the United States and Iran is eroding an interim agreement signed in June, reflecting disagreements over the Strait of Hormuz and other issues and underscoring the difficulties facing efforts to secure lasting peace.
The 14-point Islamabad Memorandum of Understanding declared an end to the war and the opening of the Strait of Hormuz to commercial shipping. But its wording was vague on key points, analysts say, while leaving difficult issues – notably the fate of Iran’s nuclear program – to a second phase of negotiations.
What have the parties said recently about the deal?
U.S. President Donald Trump last week declared the initial ceasefire agreement “complete,” saying Iranian officials were not honoring the deals they negotiated. On Monday, he said the United States would likely take control of the Strait of Hormuz.
Iranian Foreign Ministry spokesman Esmaeil Baghaei on Monday accused Washington of pushing the memorandum of understanding “into crisis,” saying Washington had consistently violated its commitments.
The Pakistani mediator urged all parties to respect their commitments.
What is the Strait of Hormuz about?
After the start of the war, which began with the US-Israeli strikes against Iran on February 28, Tehran effectively closed the Strait of Hormuz, through which a fifth of the world’s oil and liquefied natural gas passed.
Article 5 of the MoU states that commercial vessel traffic would begin immediately and that Iran would “make arrangements using its best efforts for the safe passage of commercial vessels, free of charge, for 60 days only, from the Persian Gulf to the Arabian Sea and vice versa.”
Tehran interprets this as U.S. recognition of Iran’s right to manage the entire waterway, but without imposing fees or tolls for two months.
The United States – and Gulf states – reject this interpretation, saying the text only means that Iran should facilitate the safe passage of ships and not impose restrictions backed by force.
The United States has said the strait will remain free.
Over the past week, Iran has fired on ships allegedly attempting to navigate the waterway on an unapproved route and declared it closed again.
The US Navy’s Joint Maritime Information Center said Sunday that a southbound route through the strait remained available and had been widened to allow two-way traffic.
What happens to US waivers on Iranian oil sales?
Article 10 states that Washington will grant waivers allowing the export of Iranian crude oil, petroleum products and all associated services, including banking, insurance and transportation.
This is a major victory for Iran, whose economy has been stifled for years by sanctions.
But on July 7, the United States revoked a license allowing Iran to sell oil, warning that Iranian actions in the Strait of Hormuz were “completely unacceptable” and would have consequences.
Tehran condemned this as a violation of the memorandum of understanding.
What is the status of Iran’s frozen assets?
Article 11 states that the United States “undertakes to make frozen or restricted funds and assets” of Iran fully available for use, and that Tehran and Washington would agree on procedures related to the release of these funds during negotiations.
The assets include $6 billion held in Qatari accounts. Qatar indicated on June 30 that it had not transferred these funds to Tehran.
On June 22, U.S. Vice President J.D. Vance said the United States and Qatar would have control of the funds once they were thawed, and that the money could be spent to purchase American corn, soybeans, and wheat.
In response, Ali Bahreini, Iran’s ambassador to the United Nations in Geneva, said Iran would decide alone how to use the unfrozen assets.
What is Lebanon’s place in this context?
On July 8, Iranian parliament speaker and chief negotiator Mohammad Bagher Ghalibaf called Israeli attacks in Lebanon a violation of the memorandum of understanding.
Lebanon was drawn into the conflict when Iran-backed Hezbollah opened fire on Israel on March 2, triggering an Israeli offensive and invasion from the south.
Iran had said Israel must cease fire in Lebanon as part of the deal.
Where are the broader negotiations?
The memorandum of understanding indicates that Washington and Tehran undertake to negotiate a final agreement within a maximum period of 60 days, extendable by mutual agreement. But with control of the Strait of Hormuz contested, the parties have not announced any date for new negotiations.
It took Iran years to negotiate its 2015 nuclear deal with world powers. Trump withdrew the United States from this agreement during his first term.
“The memorandum of understanding is in crisis, and you now need a secondary agreement to restore it, if it is to be a basis for restoring calm,” said Mohanad Hage Ali of the Carnegie Middle East Center think tank. “The vagueness reflected the difficulty of the issues and the fragility of the agreement.”
