The 14-Point MoU between Iran and the US, signed digitally on June 16, was too good to last. The 23-day truce was broken when the US struck 80 targets in Iran in the early hours of July 8 and Iran retaliated almost immediately, targeting 85 American targets in the Gulf region. Interestingly, and mostly as a coincidence, the MoU was signed when President Trump was at the G7 Summit in France, and was called off at the NATO summit in Turkey.
Why did the ceasefire fail? Could it have been prevented? Did the roadmap agreed upon on 22 June fail to build enough safeguards to prevent such a disaster? And, most importantly, what is likely to happen going forward? The answer to many of these questions lies in the framing of the 14-Point MoU and the uneven playfield that it created. Also, there is a need to examine how and what Iran considers as its critical national security red lines, violations of which it cannot afford to ignore.
The MoU and the Uneven Deal
The 14-Point MoU, facilitated through Pakistan, was the foundation on which the ceasefire was to be converted into a peace deal. It gave 60 days to the US and Iran to reach a final deal while simultaneously implementing measures that not only eased the global energy crisis but gave some assurances to Iran that, this time, the US was serious about a lasting peace deal.
As a result, the naval blockade was removed almost immediately and the Strait of Hormuz was opened for commercial traffic. The US Treasury Department revoked sanctions over the sale of petroleum products by Iran, too, thereby giving a huge boost to revenues to Iran from the sale of crude oil and gas. As per some rough estimates, Iran was able to sell almost 50 million barrels of oil during this brief period, giving it a direct revenue of around USD 4 billion (on an average price of crude oil at USD 80 per barrel). There were also inputs that a number of steps were undertaken to defreeze Iranian assets and money, and that an initial tranche of USD 3 billion was delivered to Iran. Also, a ceasefire in Lebanon, a thorny issue and something that Iran insisted on as a precondition, was agreed upon through a tri-lateral agreement signed between Israel, the US, and Lebanon on June 26.
The 'roadmap' that followed the MoU was agreed upon on June 22 in Switzerland, which called for establishing a communication line (almost like a hot-line) between Iran and the US in order to ensure safe passage for commercial vessels through the Strait of Hormuz. It also included key provisions for setting up a high-level committee for political oversight, technical working groups on nuclear issues, dispute resolution mechanisms, and even a de-escalation and monitoring unit to ensure compliance with the ceasefire in Lebanon.
From the contents of the MoU, it is clear that Iran got almost everything that it was looking for, while the US had to make major concessions. The most surprising facet of the MoU was not what was included, but what was left out. Despite the US insisting on its earlier demands, major issues, such as Iran's ballistic missile programme and its support to proxies in the region, found no mention in the MoU. Even clauses 8 and 9, which refer to Iran's nuclear programme, had no provision for total dismantling of the program or complete stoppage of uranium enrichment, or even clear terms on handing over of the 450 kg of enriched uranium. Except for Iran reaffirming that it will not procure or develop nuclear weapons, that it will maintain the status quo (no further enrichment) till a final deal is reached, and that the disposal of its stockpile of enriched Uranium will be resolved through a mutually agreed mechanism, there was nothing the US would have liked as 'iron-clad' guarantees on the future trajectory of Iran's nuclear programme.
The deal was, therefore, uneven and heavily loaded in favour of Iran. The US was projected as weak and compromising at home and, more importantly, in Israel, which made its discontent very clear.
Plus, the images coming out of Iran were shocking to say the least as far as the US was concerned. Millions of people came out to offer their last homage to the assassinated Supreme Leader, and dignitaries of more than a hundred countries were present at the funeral, including regional countries like Saudi Arabia, Qatar, Oman, Egypt, Turkey, and other major powers like Russia, China, India, etc. Adding to it was the fact that funeral ceremonies were held even in Iraq, which gave a clear message that Iran was not a defeated or isolated nation, but, in fact, a nation that brought together others in defiance, solidarity, and pride. It also signalled that the regime the US tried so hard to topple remained in total control.
Iran's Red Lines
One of the major reasons for the MoU to collapse is Iran's red lines, especially over control in the Strait of Hormuz. If there is one thing that Iran understood from this war, it was the strategic importance of the Strait of Hormuz and how it could turn a regional conflict into a major global crisis when it was closed.
Accordingly, Iran insisted on a very carefully drafted Clause 5 in the MoU, which gave it, along with Oman, the sole rights to administer, monitor, and facilitate traffic across the Strait of Hormuz. To pacify the US, it included a provision that commercial ships would not be charged any fees for 60 days. However, on administering it, the clause read, "Iran will conduct dialogue with the Sultanate of Oman to define the future administration and maritime services in the Strait of Hormuz, in discussion with other Persian Gulf littoral states in line with the applicable international law and the sovereign rights of coastal states of the Strait of Hormuz", thereby making it clear that it was Iran that would control the Strait.
Accordingly, when some ships attempted to take the Southern route in the Strait of Hormuz, bypassing Iran's mandated route and its checkpoints, it issued warnings and even deployed fast boats to divert them to the notified route. There was an incident of firing on a commercial ship by Iran on June 28, which led to a brief exchange of military strikes between Iran and the US, but the 'Doha talks' ensured that there were no more skirmishes till July 8.
Two issues are worth mentioning on the Strait of Hormuz. One, if Clause 5 gives Iran the lead over how the strait is to be administered, and if Iran had assured ships that there would be no fees levied till August 21, then why were the ships adamant on avoiding the safe lane designated by Iran? Were these ships being goaded or manipulated to follow alternate routes? Second, the US, too, had assured world shipping that its navy would stay in the area and ensure that no ships were targeted. How did Iran then succeed in targeting and damaging the ships, including three on July 7? Is this once again a case of American security assurances failing miserably?
The second red line for Iran is Lebanon, but there, the ceasefire has largely held, except for sporadic strikes by Israel into southern Lebanon. However, as long as such skirmishes are restricted to Southern Lebanon and do not target Beirut or other important areas, Iran is unlikely to retaliate.
Looking Ahead
The MoU has been called off, although Trump has said that he will allow peace talks to continue. The renewed escalation has now been on for two days, but has been controlled and largely restricted to coastal areas in Iran on one side and US bases in Bahrain and Kuwait on the other.
Surprisingly, the UAE has not been targeted yet in this round, which is surprising given how heavily it bore the brunt of Iran's retaliation in the first 40 days. Also, the number of successful hits on US bases is once again raising questions about the effectiveness of its security umbrella in the region.
While the US is alleging that Iran violated the terms of the MoU, Iran is defiant and ready to give a tough fight. It has threatened America that if its key infrastructure, such as electricity grids, power stations, and desalination plants, is hit, it will not only escalate but once again close the Strait of Hormuz and possibly the Bab-al-Mandeb (with the help of the Houthis in Yemen) to enforce a double blockade. If that happens, the conflict will once again become global and put pressure on the US to de-escalate. The price of crude oil has already started rising, and unless another round of 'Doha Talks' is held soon, the conflict may escalate rapidly, and the US may find itself, once again, in an avoidable 'escalation trap'.
(The author is a retired Army officer and a senior research consultant at Chintan Research Foundation)
Disclaimer: These are the personal opinions of the author
