Renewed hostilities between the United States and Iran are 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 (MoU) declared the end of the war and the Strait of Hormuz open to commercial vessels. But its wording was vague on key points, analysts say, and left difficult issues, particularly the fate of Iran’s nuclear program, for a second phase of negotiations.
What have the parties said recently about the agreement?
U.S. President Donald Trump last week declared the initial ceasefire agreement “over,” saying Iranian officials were not honoring agreements they negotiated. On Monday he said the United States would likely seize the Strait of Hormuz.
Iranian Foreign Ministry spokesman Esmaeil Baghaei on Monday accused Washington of taking the MoU “to a crisis,” claiming Washington has systematically violated its commitments.
Mediator Pakistan has urged all parties to honor their commitments.
What is at stake in the Strait of Hormuz?
After the start of the war, which began with the US and Israeli attacks on Iran on February 28, Tehran effectively closed the Strait of Hormuz, through which a fifth of the world’s oil and liquefied natural gas had been shipped.
Article 5 of the MoU says that commercial vessel traffic would begin immediately and that Iran “shall make arrangements by making every effort for the safe passage of commercial vessels free of charge for 60 days only, from the Persian Gulf to the Sea of Oman and vice versa.”
Tehran interprets this as US recognition of Iran’s right to manage the entire waterway, albeit without charging fees or tolls for two months.
The United States – and the Gulf States – reject that interpretation, considering the language to mean only 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 vessels it claims attempted to navigate the waterway on an unapproved route and declared it closed again.
The U.S. Navy’s Joint Maritime Information Center said Sunday that a southern route through the strait remains available and has been expanded to accommodate traffic in both directions.
What’s happening with US oil waivers for Iranian oil sales?
Article 10 says Washington will issue waivers allowing the export of Iranian crude oil, petroleum products and all associated services, including banking, insurance and transportation.
This was a major victory for Iran, whose economy was 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 “totally unacceptable” and would have consequences.
Tehran condemned this as a violation of the MoU.
What is the status of Iran’s frozen assets?
Article 11 says that the United States “commits to make fully available for use the frozen or restricted funds and assets” of Iran, and that Tehran and Washington would agree on procedures related to the release of these funds during the negotiation.
The assets include $6 billion held in Qatari accounts. Qatar stated on June 30 that it had not transferred these funds to Tehran.
On June 22, US Vice President JD Vance said that the United States and Qatar would have control over the funds when they were unfrozen, and that the money could be spent on US corn, soybeans and wheat.
In response, Ali Bahraini, Iran’s ambassador to the United Nations in Geneva, said Iran would be the only one to decide how to use the unfrozen assets.
How does Lebanon fit in?
Iranian parliament speaker and chief negotiator Mohammad Bagher Ghalibaf on July 8 cited the Israeli strikes in Lebanon as a violation of the MoU.
Lebanon was drawn into the conflict when Iran-backed Hezbollah opened fire on Israel on March 2, prompting an Israeli offensive and an invasion of the south.
Iran had said Israel must cease fire in Lebanon as part of the deal.
Where does this leave broader negotiations?
The MoU says that Washington and Tehran commit to negotiating a final agreement in a maximum of 60 days, extendable by mutual agreement. But with control over the Strait of Hormuz in dispute, the sides have not declared any dates for future talks.
It took Iran years to negotiate its 2015 nuclear deal with world powers. Trump withdrew the United States from that agreement during his first term.
“The MoU is in crisis, and a secondary agreement is now needed to restore it, if it is to serve as 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.”
