How to read the US-Iran draft agreement: Big commitments from Washington, not from Tehran

The United States has released the official text of a memorandum of understanding with Iran, revealing a deal that appears to grant substantial concessions from Washington with minimal immediate gains from Tehran. The agreement, negotiated under President Trump, centers on Iran's actions in the Strait of Hormuz, a critical global shipping lane.

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The essence of this memorandum of understanding (MOU) in practice is that Iran gets a lot now, including tens of billions of dollars, in exchange for not shooting at ships in the Strait of Hormuz.

According to an analysis of the text, Iran effectively leveraged the threat of disrupting traffic in the Strait of Hormuz to secure significant concessions. The essence of the memorandum is that Iran receives substantial financial benefits, including tens of billions of dollars, in exchange for ceasing hostile actions against ships in the waterway. This outcome suggests Iran's tactic of holding the strait "hostage" has succeeded.

The agreement is divided into two phases. Phase 1, which begins immediately upon signing, requires the US to lift its naval blockade and Iran to remove obstacles in the Strait of Hormuz. This phase aims to restore traffic through the strait to pre-war levels within 30 days. If the agreement ended here, it would be considered a positive outcome for the US and the global economy, as it addresses the core issue of the strait's security.

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Under these two articles, the United States lifts its naval blockade and Iran removes obstacles (such as mines) to ensure that traffic through the Strait of Hormuz returns to pre-war levels within the next 30 days.

However, the agreement extends beyond this initial phase. Article 10 of the MOU mandates that the United States will "immediately after the signing… issue waivers for exports of Iranian crude oil, petrochemical products and their derivatives, and all related services, including banking, insurance, transportation, and the like." This provision is seen as a significant concession, effectively returning Iran to the economic status it held under the Obama-era JCPOA nuclear deal, allowing unlimited oil and petrochemical sales. Energy experts estimate this article alone could provide Iran with $60-$70 billion annually.

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Under this article, the United States “immediately after the signing … will issue waivers for exports of Iranian crude oil, petrochemical products and their derivatives, and all related services, including banking, insurance, transportation, and the like.”