Renewed US-Iran hostilities are eroding an interim agreement signed in June, reflecting disagreements over the Strait of Hormuz and other issues and underscoring difficulties facing efforts to secure lasting peace.
The 14-point Islamabad Memorandum of Understanding (MoU) declared an end to the war and the Strait of Hormuz open to commercial vessels. But its wording was vague on key points, analysts say, while leaving tough questions — notably the fate of Iran’s nuclear program — to another phase of the talks.
What have the parties said recently about the agreement?
US President Donald Trump declared the initial ceasefire agreement “over” last week, saying Iranian officials were not honoring agreements they negotiated. On Monday, he said the US would likely take over the Strait of Hormuz.
Iranian Foreign Ministry spokesman Esmaeil Baghaei on Monday accused Washington of driving the memorandum of understanding “into crisis” and said Washington has consistently violated its commitments.
Mediator Pakistan has urged all sides to honor their commitments.
What is the issue in the Strait of Hormuz?
After the start of the war, which began with US-Israeli attacks on Iran on February 28, Tehran effectively closed the Strait of Hormuz, through which a fifth of the world’s oil and liquid natural gas had been shipped.
Article 5 of the memorandum of understanding states that the traffic of commercial vessels will start immediately and that Iran “will take measures to the best of its ability for the safe passage of commercial vessels without charge for only 60 days, from the Persian Gulf to the Sea of Oman and vice versa.”
Tehran interprets this as US recognition of Iran’s right to control the entire waterway, albeit without charging fees or tolls for two months.
The US – and the Gulf states – reject this interpretation, saying the language means only that Iran should facilitate safe passage for vessels and not impose restrictions backed by force.
The US has said the strait will remain free.
Over the past week, Iran has fired at ships it says have tried to sail through the waterway on an unauthorized route and declared it closed again.
The US Navy’s Joint Maritime Information Center said Sunday that a southern route through the strait remains available and has been expanded to accommodate two-way traffic.
What happens to US oil exemptions for Iranian oil sales?
Article 10 states that Washington will issue waivers allowing the export of Iranian crude oil, petroleum products and all related services, including banking transactions, insurance and transportation.
This was a major victory for Iran, whose economy was stifled for years by sanctions.
But on July 7, the US revoked a license allowing Iran to sell oil, warning that Iranian actions in the Strait of Hormuz were “totally unacceptable” and would be met with consequences.
Tehran condemned this as a breach of the MoU.
What is the status of Iran’s frozen assets?
Article 11 states that the United States “commits to making Iran’s frozen or restricted funds and assets fully available for use” and that Tehran and Washington will agree on procedures related to the release of these funds during the negotiations.
The assets include $6 billion in Qatari accounts. Qatar said on June 30 that it had not transferred these funds to Tehran.
On June 22, US Vice President JD Vance said the US and Qatar would have control of the funds once they are unfrozen and that the money can be used on US corn, soy and wheat.
In response, Ali Bahreini, Iran’s ambassador to the United Nations in Geneva, said Iran alone would decide how to use unfrozen assets.
How does Lebanon fit in?
Iran’s Parliament Speaker and Chief Negotiator Mohammad Bagher Ghalibaf on July 8 cited 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 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 Washington and Tehran commit to negotiating a final agreement within a maximum of 60 days, which can be extended by mutual consent. But with control of the Strait of Hormuz disputed, the parties have not declared any date for further talks.
It took years for Iran to negotiate its 2015 nuclear deal with world powers. Trump pulled the US out of this deal during his first term.
“The MoU 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.”
