According to the Financial Times of the UK, the United States and Iran have signed a memorandum of understanding aimed at ending the war and opening the Strait of Hormuz.
"I am signing the document at Versailles Palace." said US President Trump on June 17th after dinner with French President Macron in the palace. Earlier that day, Trump stated that if Iran "behaves well", US will unblock its frozen funds and lift sanctions.
The White House released a video of Trump signing the US-Iran Understanding Memorandum. The White House’s X account.
We took their money, but that was originally their money," Trump said at the G7 summit on July 17th. "If we don't give the money back, no one will invest in dollars anymore."
According to Iran International Television (IRANINTL), Iranian President Ebrahim Raisi signed a memorandum of understanding between Iran and the United States on the 17th. There was no formal signing ceremony between the two parties.
Pakistan Prime Minister Sharif also posted on social media platform X to confirm that the US and Iran have signed a memorandum of understanding.
《Islamist Fort Understanding Memorandum》 will come into effect immediately. As the first step, the Islamic Republic of Iran will immediately reopen the Hormuz Strait, while the United States of America will immediately lift its sea blockade. Sheikh Sharif wrote that, and added that Pakistan and Qatar will co-chair a signing ceremony in Switzerland on Friday.
Pezeshchiyan presents the Memorandum of Understanding signed by the two presidents. Iranian International Television
The Hormuz Strait carries about one-fifth of the world's oil transportation. Since the war between the United States and Israel against Iran in February this year, most of the strait has been closed, causing a global energy crisis. Affected by the memorandum of understanding signed between the US and Iran, Brent crude oil fell 1.2% during Asian trading on the 18th, reaching $78.62 per barrel.
According to reports, details of the memorandum of understanding announced by the Trump administration indicate that as part of a final solution, including the nuclear agreement, the United States will ‘abolish all types of sanctions against Iran’, including those stipulated by the UN Security Council resolutions.
Trump said, “The sanctions we are imposing now are sufficient to prevent them from rebuilding their country ever again. That would mean poverty for 91 million people.” He also stated that Iran will be allowed to retain some ballistic missiles. “They must keep some, because others do too.”
According to the Memorandum of Understanding, the United States agrees to grant Iran exemptions from oil exports for a period of 60 days beyond the ceasefire agreement. Iran will gradually open the Strait of Hormuz, while the United States will lift the blockade on Iranian ports. The 60-day period can be extended with the consent of both parties.
However, the memorandum of understanding between the United States and Iran is not the final agreement. The ultimate solution will depend on whether the United States and Iran can reach a nuclear agreement, and the thawing of Iranian assets will depend on the progress of the final solution.
It is worth mentioning that this memorandum of understanding has caused some backlash among Republicans and Trump critics in the United States. They believe that the government has made too many concessions to Tehran in order to lower oil prices before the mid-term elections in November.
According to reports, this memorandum of understanding covering 14 points does not mention Iran’s ballistic missile arsenal or its support for radical organizations in certain regions. These are all targets that the United States have had in the past, and they are issues that are of great concern to Israel and Gulf allies of the United States.
On the 17th, Trump argued that Iran should be allowed to retain its ballistic missile arsenal, saying, "Missiles are not a problem. They can cause some localized damage, but they will not destroy an entire planet."
On the nuclear issue, the memorandum states that both parties will find a mechanism for ‘mutual recognition’ to handle Iran's uranium enrichment.
Currently, Iran has a stockpile of over 9,000 kilograms of enriched uranium, including 440 kilograms of highly enriched uranium that is close to weapon-grade concentration.
Trump had previously demanded that Tehran hand over these nuclear materials to the United States. The memorandum of understanding stipulates a “minimum” requirement for the on-site dilution of Iran’s enriched uranium under the supervision of the International Atomic Energy Agency.
"They (Iran) were saying: We will destroy these concentrated uranium stockpiles. This is at least the minimum measure to take." Said a US senior official.
The memorandum of understanding also stipulates that the United States will work with regional partners to establish a $300 billion fund for Iran’s “reconstruction and economic development”. However, the launch of this fund also depends on the conclusion of the final agreement.
Trump downplayed this fund plan on the 17th, stating that the United States would not invest in it. A person familiar with the US-Iran negotiations said that the agreement was designed for companies that wish to invest in Iran.
"If we reach an agreement in the end, if the Iranians take action, we will allow for sanctions to be lifted, such as allowing the United Arab Emirates to build a power plant in Iran." A US official said.
The United States also promised to withdraw its military forces from the regions around Iran within 30 days after the final agreement is reached. Another senior U.S. official said that after negotiations between the U.S. and Iran regarding nuclear issues, both sides will also discuss topics such as “regional stability” and “armed funding for proxies”.
This official still claims that if the two sides fail to "reach a good deal," Trump "will not hesitate" to use all his available tools against Iran. “A key meeting in Switzerland this weekend will be crucial for truly understanding how we proceed into the next stage.” The official added.
Iranian Foreign Minister Alaaghiie said on the 16th that the memorandum of understanding between Iran and the United States will be officially signed and come into effect in Switzerland on the 19th. After that, both countries will continue a new round of negotiations for 60 days to ultimately reach a comprehensive agreement.
