The MOU’s Unequal Bargain: Iran’s Advantage, Washington’s Retreat

Spotlight

• Iran’s advantage is baked into the MOU’s architecture, with immediate concessions flowing to Tehran upfront while US gains on the nuclear file remain deferred and conditional.
• Spoilers persist, as Israel’s operations in Lebanon continue alongside hardline rhetoric in Washington and Tehran, keeping escalation risks very real. 
• Washington’s climbdown is evident in abandoning the maximalist positions that launched Operation Epic Fury, though whether the final deal surpasses Obama’s 2015 achievement remains an open question. 

After claiming more than 38 times that a peaceful resolution with Iran was imminent — undoubtedly with financial markets in mind — President Donald Trump’s June 14 announcement finally became reality on June 18, when the United States (US) and Iran formalised a 14-point Memorandum of Understanding (MOU), signed electronically by Trump and Iranian President Masoud Pezeshkian and later physically at the Palace of Versailles. A quadrilateral format — the US, Iran, and mediators Pakistan and Qatar — then convened at the Swiss resort of Burgenstock on 21 June for the first direct talks on implementation. Mediators declared “encouraging progress,” with Vance saying a “good foundation“ had been laid. The concrete outputs: a 60-day roadmap toward a final deal, a high-level committee to facilitate technical talks on the nuclear file, and further negotiations on all outstanding issues continuing through the week of 22 June.

The talks did not begin smoothly. Before Vance arrived in Switzerland, verbal salvos were exchanged: Trump threatened to hit Iran “very hard again” should Tehran fail to rein in Hezbollah; Iran’s lead negotiator Mohammad Bagher Ghalibaf warned the US to be “careful about their statements,” and the Iranian delegation briefly departed the negotiating venue after meeting Qatari mediators. Iranian President Pezeshkian publicly asserted Tehran’s “right to enrich uranium,” drawing a fresh threat from Trump to take over Iran altogether.

The combative rhetoric reflects both sides’ need to project victory to domestic audiences. Yet the initial fruits of Burgenstock suggest the central question remains: a moment of reckoning looms. A trajectory toward settlement has been laid, and early concessions on sanctions and nuclear oversight are already generating momentum.

MOU Evaluation: Who has the Upper Hand?

A close reading of the MOU’s 14 points reveals a structural asymmetry: immediate concessions flow heavily toward Iran, while US gains on the nuclear file and Hormuz are deferred, conditional, or contested. Clause 5 is instructive: Tehran is required to ensure “safe passage of commercial vessels with no charge, for 60 days only,” after which it must coordinate with Oman and “other Persian Gulf littoral states” to define the “future administration and maritime services in the Strait of Hormuz.” 

The Strait’s long-term status remains unresolved and firmly in Iranian hands to shape — and the MOU’s sequencing compounds this advantage. Clause 13 stipulates that negotiations on the final deal begin only after the US has commenced blockade removal, Hormuz passage, sanctions waivers, and asset release. In other words, Iran secures its economic concessions first; the hard bargaining comes after. This architecture effectively allows Tehran to use Hormuz access and the flow of frozen funds as leverage to delay or condition concessions on the one issue Washington went to war over — Iran’s nuclear programme.

US military assurances further entrench Iran’s upper hand. Clause 4 commits Washington to beginning naval blockade removal immediately upon signing, with full removal within 30 days, and the withdrawal of US forces from Iran’s proximity within 30 days of a final deal. On the economic front, the US Treasury has already acted, issuing General License X to authorise Iranian oil sales and ease decades-old sanctions through August 21. A US$300 billion reconstruction and development plan, underwritten by the US and regional partners, adds further impetus to Iranian economic recovery — however controversial its funding remains. Most significantly, the mutual commitment to “respect each other’s sovereignty” and refrain from interference in internal affairs signals Washington’s effective relinquishment of regime change as an objective.

The US gains are thinner but not insignificant, and on the nuclear file they touch the non-negotiable at the heart of Operation Epic Fury. Preventing Iran from acquiring a nuclear weapon was the Trump administration’s stated casus belli for launching the campaign, and Clause 8 delivers a meaningful first step: Iran reaffirms it “shall not procure or develop nuclear weapons” and agrees to resolve its enriched uranium stockpile via downblending under the International Atomic Energy Agency’s supervision. Vance’s public confirmation that nuclear inspectors will return to Iran, potentially within days, is the most concrete signal yet that this commitment is moving from paper to practice.

Clause 14, which stipulates that the final deal must be endorsed by a “binding UN Security Council resolution,” serves a dual purpose: it provides the multilateral lock-in absent from the JCPOA, while also offering Tehran the security guarantees it has long demanded, anchoring any agreement within the international system rather than leaving it vulnerable to the whims of a future US administration. Clause 3 sets a 60-day maximum for a final deal, extendable only by mutual consent, placing meaningful time pressure on Tehran as well.

The Spoilers in the Room

Israel was excluded entirely from the MOU negotiations — Netanyahu has admitted he does not even know the memorandum’s contents, a remarkable admission given that the war was launched in coordination with Tel Aviv. Clause 1 declares an end to hostilities on all fronts including Lebanon, yet Israel has insisted it retains freedom of action against Hezbollah, with Netanyahu stating that Israeli forces will remain in southern Lebanon for as long as deemed necessary. The Lebanon front encapsulates a dual dynamic: Israeli intransigence on one side, and Iran’s deliberate use of Hezbollah as leverage on the other. When Netanyahu threatened to bomb Hezbollah targets in Beirut in early June, Tehran responded by threatening to abandon US-Iran negotiations altogether — a move that prompted Trump to dress Netanyahu down in a call, demanding he stand down. Israel backed off the Beirut strikes, but later continued strikes on June 19 in southern Lebanon that killed at least 15 despite a ceasefire. The Trump-Netanyahu relationship, while still functional, is visibly fraying — a fault line Iran is bent on widening.

The second category of spoilers is hardline rhetoric from both sides, which has repeatedly threatened to derail proceedings. Trump’s social media threats during the Burgenstock talks caused Iran to recess negotiations before they had properly begun. On the Iranian side, Parliament Speaker Ghalibaf insisted Hormuz fees, framed as a “payment of services,” would continue after the 60-day toll-free window — a position that directly contradicts the spirit of the MOU. The MOU’s own Clause 1 commits both sides to “refrain from the threat or use of force,” a commitment both parties have already violated in tone if not yet in action. It is clear that both leaderships are responding to domestic constituencies. The danger, however, is that escalatory words harden into escalatory actions before the 60-day window has had a chance to deliver.

Maximalism to Trade-offs

The Burgenstock talks have thus far produced concrete outcomes that justify measured optimism. A roadmap toward a final deal is in place, a communication line on Hormuz established, and a Lebanon de-confliction cell created. Iran’s Foreign Minister Araghchi has claimed that oil and petrochemical export waivers have been secured and the naval blockade lifted — early implementation signals that give Tehran an incentive to remain at the table.

Yet the optimism must be tempered by the weight of what sanctions relief entails. Lifting sanctions on Iran unravels a web of restrictions stretching back five decades, requiring congressional approval that will be politically contentious and time-consuming. The irony is acute: Trump spent years condemning the Obama administration for providing Iran with what he called a “windfall of cash” and “access to the international financial system” under the Joint Comprehensive Plan of Action (JCPOA) — a deal he described in 2018 as “one of the worst and dumbest” ever negotiated. He argued that Obama had “surrendered maximum leverage“ by lifting sanctions in exchange for what he viewed as temporary nuclear restrictions. 

The MOU of June 2026 commits Washington to a broadly similar path. Sanctions relief will not only facilitate Iran’s recovery, but also strengthen its military capabilities and proxy network. It is difficult to see how Trump’s final deal will substantively surpass what Obama achieved. Two other areas will also prove challenging to address: keeping the Strait of Hormuz toll-free in the long run, and sustaining the Lebanon de-confliction cell without Lebanese and Israeli representatives at the table.

What is undeniable, however, is the climbdown in Trump officials’ rhetoric across multiple fronts. Vance has spoken of a relationship with Iran that could “fundamentally transform.” Trump has said Iran may retain ballistic missiles and expressed no urgency on extracting enriched uranium. Sanctions relief, once treated as treasonous appeasement, is now being packaged as strategic leverage. Whether this translates into a final deal remains uncertain given the number of variables. But the concrete outcomes from Burgenstock indicate genuine political will on both sides, and a mutual understanding that trade-offs are unavoidable. In this conflict, even the beginning of trust-building deserves some cheer.

Clemens Chay is Senior Fellow for Geopolitics at the ORF Middle East.