US President Donald Trump announced on Thursday that a deal with Iran could be reached soon. He talked about a “memorandum of understanding” (MOU), which both sides aim to conclude in the coming days.
Iranian officials said no draft memorandum of understanding had been approved yet. However, if the United States were to accept the proposal put forward by Iran, it was likely that Iran would follow suit.
The agreement would be the most significant diplomatic development since the conflict in Iran began three months ago – a conflict that has cost thousands of lives and sent global energy prices soaring.
Iran’s nuclear program remains a major obstacle
At the center of US-Iran talks is Tehran’s nuclear program, particularly its management of about 400 kilograms (970 lb) of uranium enriched to about 60%.
If further enriched, this material could theoretically be enough to make multiple nuclear weapons – something the United States wants to prevent.
Iran’s state-run IRNA news agency said that “Iran’s right to retain uranium enrichment and enriched materials…will be emphasized with a view to including them in the final agreement.”
While the US side has reportedly proposed a long-term moratorium of up to 20 years, Tehran has so far rejected this approach. Instead, talks have focused on a much shorter break of about five years.
Controversy over highly enriched uranium
Iran views its enriched uranium as a bargaining chip in negotiations and is unwilling to give it up. The country itself has proposed reducing content to reduce enrichment levels, but only in exchange for the removal of US sanctions.
Third country participation is also being discussed as a possible compromise. Russia has repeatedly offered to take possession of Iran’s highly enriched uranium for safe storage on its territory or for further processing.
China is said to have indicated willingness to join a new deal as a mediator and logistics partner.
Along with the nuclear issue, the economic dimension also plays a central role. The main point of contention is how to handle Iranian assets frozen abroad, which are estimated to amount to $100 billion (€86 billion).
Most of these funds come from oil exports that have been blocked due to US sanctions in countries like South Korea, China and Japan. Tehran is demanding the release of between $6 billion and $12 billion as well as sanctions relief.
Meanwhile, the US government wants to release funds slowly and strictly for humanitarian purposes only.
At the same time, officials in Washington are reportedly discussing using parts of Iran’s frozen assets to compensate for losses suffered by US allies in the Gulf region.
In response to the US attacks, Iran targeted US bases and their logistics facilities in Arab countries along the Persian Gulf. US Treasury Secretary Scott Besant is said to have tasked a team of experts with estimating the cost of the recent increase and exploring possible funding options.
A Marshall Plan or an Iraq Deja Vu?
In a post on Truth Social on June 8, Trump said that while peace talks were moving forward, “Ignorance or stupidity was getting in the way of it.”
When Trump was asked to clarify his position during an interview with American broadcaster ABC News, he said, “If people are stupid, we’ll end up in some situation where we have to dismantle the entire infrastructure of a nation, and I don’t think that’s a good thing, because somebody has to rebuild it.”
Trump suggested that in such a scenario, the US would likely help finance Iran’s reconstruction.
He said, “Someone’s going to have to build all this infrastructure… You know, they’re talking about a trillion dollars, maybe even more. And you know that’s why we’ll probably be involved in rebuilding, right, helping them rebuild.” Asked if it would be like the Marshall Plan for Iran, Trump replied, “Yes.” He added, “But we will get half of their oil.”
However, Iran rejects any foreign control over its oil resources as a violation of national sovereignty. Public opinion is also shaped by the experience of neighboring Iraq.
A significant portion of Iraq’s oil revenues – the country’s main source of income – are effectively controlled by the Federal Reserve Bank of New York in an arrangement that followed the US invasion of Iraq in 2003.
This system was originally established by the US-led transitional administration to secure funding for reconstruction. Infrastructure projects aimed at modernizing the economy are still incomplete.
What will happen to the Strait of Hormuz?
As a preliminary step after any agreement, shipping passing through the Strait of Hormuz is to be gradually normalized and the US blockade of Iranian ports is lifted.
Disruption to shipping in key waterways is already having a significant impact on global trade and energy prices. Before the conflict about 20% of global oil and liquefied natural gas exports passed through this narrow chokepoint.
Despite a ceasefire between Iran and the US since April 8, the past weeks have seen almost daily military clashes between the two sides in the Persian Gulf.
According to US statements, the operations have targeted Iranian positions along the coast, including surveillance facilities, communications systems, and air defense sites, with the aim of weakening Tehran’s military capabilities and especially its potential control over the strait.
Iran, for its part, responded with direct attacks on US targets in the region and recently escalated this by shooting down a heavy combat helicopter.
On Friday, Iranian state media said Tehran would not give up control over the strategic Strait of Hormuz.
“Iran makes no commitment to relinquish management of the strait or to the restoration of conditions that existed before the US and Israeli military invasion,” IRNA reported.
This article was originally published in German.