The US-Iran MoU expires Monday with sanctions, the Strait of Hormuz and future negotiations unresolved as both sides accuse each other of breaching the June agreement
The US-Iran Memorandum of Understanding (MoU) expires on Monday, with no agreement in sight on whether to extend it or return to negotiations. Tehran says Washington failed to meet key commitments under the June deal, while the US has continued its military and economic pressure on Iran. The Strait of Hormuz, sanctions and Iran’s nuclear programme remain among the biggest points of contention.
US President Donald Trump and Iranian President Masoud Pezeshkian electronically signed the MoU on June 17 following rare high-level talks hosted by Pakistan. It sought to end more than three months of war that had killed thousands and severely disrupted commercial activity across the Gulf, particularly oil and gas exports relied on globally.
The agreement aimed to secure an immediate diplomatic end to the fighting, while leaving complex issues surrounding Iran’s nuclear programme for later negotiations. It also included efforts to resolve the conflict in Lebanon.
Under the MoU, Iran and the US “declare the immediate and permanent termination of military operations”. A subsequent “final deal” would “confirm the permanent termination of the war on all fronts”.
That final agreement was to receive UN Security Council backing and be reached within a maximum of 60 days, although both sides could agree to extend the deadline.
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The US committed to ending its naval blockade within 30 days, withdrawing its forces from areas near Iran after the final deal and starting work on a reconstruction and development package worth at least $300bn.
Washington also agreed to terminate sanctions against Iran, issue waivers for Iranian oil exports and allow Tehran access to frozen funds.
Iran, for its part, was expected to clear mines from the Strait of Hormuz and allow ships to pass “with no charge” for 60 days. Tehran also reaffirmed that it would not seek nuclear weapons and agreed to negotiate issues including enrichment, with the details to be incorporated into a final UN-backed deal.
Ceasefire claims quickly turn into a blame game
The agreement soon ran into disputes over its interpretation and implementation. The US and Iranian versions differed slightly, while both sides disagreed over whether the MoU represented a ceasefire or a more permanent settlement.
By June 27, Trump described Iranian strikes in the region as “a foolish violation” of the deal. Tehran countered that US strikes “violate Article 1 of the Memorandum of Understanding”.
Trump declared the agreement “over” on July 7. The US then continued attacks on Iran, including strikes on what Tehran described as civilian infrastructure, killing at least 50 people.
Iranian officials said Washington had “violated and suspended” all its commitments and that Tehran had “likewise suspended all our own commitments”.
The dispute also affected the financial commitments in the agreement. The US has not fully lifted sanctions on Iran, while Trump has rejected the idea of paying Tehran for reconstruction.
Instead, he suggested Iran should compensate 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”.
Hormuz becomes the central pressure point
The Strait of Hormuz has emerged as one of the biggest unresolved issues since the agreement was signed. Shipping has not returned to normal, with Iranian and US officials continuing to insist that their side controls the waterway.
Tehran has demanded sanctions relief and the release of frozen assets before the strait fully reopens.
Earlier this week, the Pentagon said it fired on a Panama-flagged cargo vessel in the strait because it “violated the US blockade against Iran.”
Iranian Foreign Minister Abbas Araghchi said Tehran was separately working with Oman on new shipping routes through the Strait of Hormuz. He stressed, however, that such an arrangement would depend on reaching a political solution.
In the latest developments, Qatar and Pakistan have continued to exchange messages with Iran as mediators, but Tehran has yet to decide whether it will resume negotiations with Washington.
“We have not yet made a decision to restart negotiations with the United States,” Araghchi said in a post on Telegram on Saturday.
Iran prepares for tougher negotiations
Recent changes in Iran’s national security leadership could shape any future talks.
Earlier this month, former IRGC chief Mohsen Rezaei took over as head of Iran’s Supreme National Security Council, the country’s top security body. Analysts told Al Jazeera that the appointment was intended to improve coordination between military and civilian operations.
Mostafa Khoshcheshm, professor at the University of Applied Sciences in Tehran, said Rezaei’s appointment and other leadership changes “shows Iran believes it has the upper hand”.
Khoshcheshm said Tehran could enter future negotiations with additional demands, including an end to the war in Gaza, the lifting of sanctions and the blockade of Yemen, and even the denuclearisation of Israel.
He said Iran believes Washington failed to deliver on several commitments, including releasing Iranian assets, lifting sanctions, ending its naval blockade and ensuring Israel withdrew from southern Lebanon.
“The ceasefire stopped and was rendered obsolete after the US didn’t comply with the terms of the agreement, or the MoU,” Khoshcheshm told Al Jazeera.
“Now, formally, on paper, it is said the deadline has ended,” he added.
Trump raises the stakes over Hormuz
Trump has meanwhile escalated his rhetoric over the waterway and Washington’s campaign of economic pressure against Tehran.
Speaking to supporters in New York on Friday, Trump said the US would soon claim the Strait of Hormuz.
“After we finish defeating Iran, which is being very badly defeated, pretty soon I’ll be declaring the Hormuz Strait a territory of the United States,” he said.
US Treasury Secretary Scott Bessent also warned that Washington would impose measures on Iran that have “never been seen”.
Tehran claims victory
Iranian leaders have continued to portray the June agreement as a success for Tehran.
Iranian Parliament Speaker Mohammad Galibaf told reporters in Tehran on Saturday that the concessions Iran secured under 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.