Informed sources revealed that the U.S. administration has categorically informed regional mediators that it has no intention of returning to the memorandum of understanding signed with Tehran last June, a development that closes the door on any potential revival of the agreement that collapsed just weeks after it was signed at the Palace of Versailles. This U.S. stance drove crude oil prices higher, surpassing the $88-per-barrel threshold, while global equity indices retreated amid mounting concerns over supply disruptions in the Strait of Hormuz.
The previous memorandum, which Vice President J.D. Vance helped negotiate, was intended to reopen the strategic strait and initiate talks on Iran’s nuclear program in exchange for sanctions relief and access to Tehran’s frozen assets. However, the agreement quickly unraveled after Iran began targeting shipping traffic to assert control over the waterway, prompting U.S. President Donald Trump to adopt a policy of “maximum economic pressure” rather than returning to the negotiating table.
On the Iranian side, the Islamic Revolutionary Guard Corps has adopted an equally hardline stance, with its spokesman Brigadier General Hossein Mohebbi conditioning any discussion of reopening the strait on Washington’s return to the memorandum and an end to what he described as obstruction. “If the United States stops obstructing and returns to the memorandum of understanding, we can open the Strait of Hormuz within the framework of the agreement that was reached,” Mohebbi told Iranian state television, adding that Tehran’s conditions must be accepted by Washington.
The conservative faction in Tehran bases its position on a particular interpretation of Clause 5 of the June memorandum, which it views as granting Iran broad authority to control maritime navigation terms—an interpretation that Washington has not publicly commented on to date.
Faltering Mediation Efforts
An intensive round of shuttle diplomacy failed to narrow the gap, as Pakistan’s Chief of Army Staff Asim Munir visited Tehran without achieving tangible progress, while Oman’s foreign minister subsequently attempted to finalize an agreement on transit corridors as a preliminary step toward broader negotiations. The effort stalled, however, due to Iran’s insistence on amendments granting it greater control over traffic movement.
Official Iranian narratives regarding the outcome of the meeting with Muscat were contradictory, as Tehran announced that an agreement on transit routes had been reached, while Oman did not confirm any agreement, and Iranian officials offered conflicting accounts of what was actually accomplished. Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani also met with Iran’s foreign minister in Tehran, and the two sides issued a joint statement affirming that they discussed ways to avoid escalation and lay the groundwork for talks, without announcing any breakthrough.
Commenting on the situation, Omar Karim, a researcher at the University of Birmingham, said that “the old memorandum is effectively dead from all sides,” noting that the mediators’ task of pushing both parties toward any settlement has become more difficult under current circumstances.
Escalation of U.S. Sanctions
The diplomatic stalemate coincided with the U.S. Treasury Department’s launch of “Operation Economic Pariah” on August 25, which targeted approximately 60 entities and expanded the scope of secondary sanctions to cover five key sectors.
Targeted SectorNature of MeasuresDigital AssetsListing entities dealing in cryptocurrencies on behalf of IranTechnologyExpanding restrictions on the supply of sensitive componentsGoldTargeting precious metal smuggling networksAviationImposing sanctions on companies providing services to Iranian aviationShippingPursuing vessels and companies transporting Iranian oil
Treasury Secretary Scott Bessent described the move as a “comprehensive economic assault” on Iran’s global financial network.
Shipping Traffic in the Strait
Ship-tracking data showed a slight increase in visible transit traffic of cargo vessels through the Strait of Hormuz to 10 ships on Wednesday, compared with 8 ships on Tuesday. However, this figure remains well below the 10-day moving average of approximately 15 ships. In a separate incident, an oil tanker was struck by an unidentified projectile on Thursday, causing a fire that was later extinguished, according to the United Kingdom Maritime Trade Operations agency.
Friday, August 28, marks the six-month anniversary of the strikes targeting Iran, a symbolic occasion that analysts believe could prompt both sides to reassess a protracted conflict with no clear horizon for resolution.