US-Iran MoU is set to expire: What to know

MoU Expiry Approaches Amid Stalemate

The Memorandum of Understanding (MoU) aimed at ending fighting between the US and Iran is set to expire on Monday, with little sign that either side is willing to extend the agreement, which both sides have accused the other of violating for weeks.

Iranian Foreign Minister Abbas Araghchi said in a post on Telegram on Saturday: "We have not yet made a decision to restart negotiations with the United States." Mediators from Qatar and Pakistan continued to exchange messages with Iran, Araghchi added, noting that Iran was working on a separate agreement with Oman to hash out new shipping routes for the Strait of Hormuz, but only if a political solution was reached.

On the US side, President Donald Trump told supporters in New York on Friday that the US would soon claim the critically important waterway for itself.

Background of the Agreement

The agreement, signed on June 17 by Trump and Iranian President Masoud Pezeshkian, followed rare high-level talks hosted by Pakistan. It was meant to bring an end to more than three months of war that had killed thousands and crippled commercial movement in the Gulf, especially of oil and gas exports relied on globally. Leaving complex issues such as Iran's nuclear programme to be dealt with later, the agreement sought not only to find an immediate diplomatic solution to halt the war with Tehran, but also to find an end to conflict in Lebanon.

The agreement declared the "immediate and permanent termination of military operations" and stated that a "final deal" would "confirm the permanent termination of the war on all fronts." The "final deal" was to be endorsed by the UN Security Council and reached in a maximum of 60 days, which could be extended by mutual consent.

The US was to end its naval blockade within 30 days, remove its forces from near Iran after the "final deal" was reached, and begin work on a reconstruction package worth at least $300 billion. The US also committed to terminating sanctions, issuing waivers for oil exports, and allowing access to frozen funds. Iran, in turn, was to clear mines from the Strait of Hormuz, allow ships to pass with no charge for 60 days, reaffirm its commitment not to seek nuclear weapons, and negotiate on enrichment.

Disputes and Violations

Disputes arose over whether the agreement was a ceasefire or permanent, and each side accused the other of violations. By June 27, Trump called Iranian strikes "a foolish violation." Iran said US strikes "violate Article 1" of the MoU. On July 7, Trump said the agreement was "over," and US attacks continued, killing at least 50 people. Iranian officials said the US had "violated and suspended" all commitments and Tehran had "likewise suspended all our own commitments."

The US has not fully lifted sanctions, and Trump suggested Tehran pay compensation to families of protesters. Reopening Hormuz has not materialised; the Pentagon fired on a Panama-flagged cargo vessel for violating the US blockade.

Mostafa Khoshcheshm, a professor, commented: "The ceasefire stopped and was rendered obsolete after the US didn't comply with the terms of the agreement, or the MoU."

Iran's Position of Strength

Iranian President Masoud Pezeshkian said on Friday it was time to end the months-long Middle East war with the United States because Tehran appeared to be in a stronger position than Washington. "It is better that we bring the war to an end now as we are in a position of power and dignity," Pezeshkian said in a meeting with doctors. "The whole world acknowledges our victory and emphasises that America has attacked our schools, hospitals and infrastructure in violation of all regulations and is hated around the world."

Pezeshkian defended the memorandum of understanding, claiming it did not signal a defeat for Tehran. "They cannot find even a single clause in this agreement that indicates capitulation. All the commitments concern the other side," he said. He also rejected criticism that Tehran had been forced to make concessions, describing the outcome of negotiations as a "major achievement" approved by Iran's Supreme National Security Council.

His remarks come weeks after Iran's Supreme Leader Mojtaba Khamenei said he had approved the deal despite having "different views." Hardline lawmakers in Iran's parliament have also criticised the government over the deal, accusing it of giving concessions to the US, mostly over the re-opening of the strategic Hormuz Strait.

Araghchi said on Friday that the Islamabad MoU was "the end of the war, not a ceasefire," and there was no 60-day ceasefire to extend. In a sign of a tougher stance, Mohsen Rezaee was named as new head of Iran's Supreme National Security Council. Khoshcheshm said the appointment "shows Iran believes it has the upper hand."

US Economic Pressure and International Reactions

As Tehran claimed to be in the stronger position, the US has said it would ramp up sanctions to heap pressure on Tehran. US Treasury Secretary Scott Bessent vowed Washington would "collapse" the Iranian regime with its threatened campaign, nearly six months since their war began. Bessent said the plan to ramp up economic sanctions against Iran meant Washington was less likely to have to return to heavy military operations. He said he would give further details of the economic measures during a press conference on Monday.

Iran's foreign ministry accused the US of "economic terrorism" and "crimes against humanity." The ministry statement said: "The perpetrators and instigators of these sanctions are deserving of trial and punishment for committing such heinous crimes." Araghchi called the sanctions plan "Economic D-Day" and a "diversion from America's own crisis: unprecedented debt and surging interest costs."

China criticised Washington's economic plan, with foreign ministry spokesman Lin Jian saying "sanctions and pressure will not help resolve the issue" and that "China calls on all relevant parties to take responsible measures and resolve the problem through political and diplomatic means." Chinese President Xi Jinping is due to visit the White House on September 24.

Analysts and Military Constraints

Barbara Slavin, of the Stimson Centre, said the US has few military levers left: depleted interceptor missiles, drained oil reserves, and carriers at sea longer than planned. She said "Iran is playing hardball... They're making the international economy and they're making Donald Trump sweat." Slavin predicted the conflict "resolves through a deal, probably after our midterm elections."

Iranian Parliament Speaker Mohammad Galibaf said the concessions Iran won were "a source of pride and victory" and "we truly emerged victorious in this war, both militarily and politically."

Trump on Friday announced plans to declare the Hormuz Strait a territory of the US: "After we finish defeating Iran... I'll be declaring the Hormuz Strait a territory of the United States."

According to reports in US media, the American navy has been organising and protecting secret convoys of tankers through the southern sector of the Strait of Hormuz, enabling between five and 10 million barrels a day of oil to be exported.

Iranian officials have rejected the sanctions strategy, arguing that decades of sanctions have failed to force Tehran to surrender. Foreign Ministry spokesman Esmaeil Baghaei said Washington's repeated return to sanctions had proved futile. Analysts warned increased economic pressure could harden Iran's position rather than force a settlement.

Pezeshkian previously said negotiations aim at ending the war, lifting the naval blockade, and releasing frozen Iranian assets before nuclear talks resume. His comments suggest Tehran wants to frame the end not as capitulation but as a settlement from a position of leverage.