US-Iran Deal Nears Expiry: Key Facts to Know

A memorandum of understanding (MoU) aimed at ending hostilities between the US and Iran is set to expire on Monday, with little sign that either side is ready to renew an agreement each has accused the other of violating in recent weeks.

“We have not yet made a decision to resume negotiations with the US,” Iranian Foreign Minister Abbas Araghchi wrote on Telegram on Saturday. Meanwhile, mediators from Qatar and Pakistan continue to exchange messages with Iran. Araghchi said Iran is working on a separate agreement with Oman regarding new shipping routes in the Strait of Hormuz, but stressed this is only feasible if a political solution is reached.

On the US side, President Donald Trump told supporters in New York on Friday that Washington would soon declare the strategic waterway as its territory.

What is the memorandum?

The agreement was signed on June 17 by President Trump and Iranian President Masoud Pezeshkian following rare high-level talks mediated by Pakistan. It aimed to end more than three months of war that killed thousands and paralyzed commerce in the Gulf, especially global oil and gas exports.

The deal sought an immediate diplomatic solution to halt the fighting with Tehran while also ending the conflict in Lebanon, leaving complex issues such as Iran’s nuclear program for a later phase.

Under the agreement, both sides “declare the immediate and permanent cessation of military activities” and a “final agreement” would “confirm the permanent end of war on all fronts.” That accord was to be endorsed by the UN Security Council and reached within a maximum of 60 days, extendable by mutual consent.

The US committed to lifting its naval blockade within 30 days, withdrawing forces near Iran after a final deal, and launching a reconstruction and development package for Iran worth at least $300 billion. Washington also agreed to end sanctions, grant exemptions for Iranian oil exports, and allow Tehran access to frozen assets. In return, Iran was to clear mines in the Strait of Hormuz and allow ships to pass “freely” for 60 days. Tehran reaffirmed it does not seek nuclear weapons and would negotiate on issues such as uranium enrichment.

Has the memorandum been successful?

While the US and Iranian texts differ slightly, disputes mostly center on fundamental issues such as whether the deal is a ceasefire or a long-term agreement, and what each side must do.

By June 27, President Trump called Iran’s attacks “a stupid violation,” while Iran said US attacks “violate Article 1 of the Memorandum.” On July 7, Trump declared the deal “over” and the US resumed airstrikes on Iran, killing at least 50 people. Iran accused the US of “violating and suspending” all commitments, and Tehran likewise “suspended all its obligations.”

The US has not fully lifted sanctions, while the reopening of Hormuz has not materialized. Earlier this week, the Pentagon said it fired on a Panama-flagged cargo ship for “violating the US blockade against Iran.”

“The ceasefire has stopped and become meaningless after the US failed to comply with the terms,” Mostafa Khoshcheshm, a professor at Tehran University of Applied Sciences, told Al Jazeera. He said Tehran sees the US as breaking promises on unfreezing assets, lifting sanctions, removing the naval blockade, and securing Israel’s withdrawal from southern Lebanon.

What comes next?

Foreign Minister Araghchi said on Friday that the Islamabad MoU’s aim was “to end the war, not a ceasefire,” and because the US violated it, “there is no 60-day ceasefire to extend.”

The appointment of Mohsen Rezaee, a former chief of Iran’s Islamic Revolutionary Guard Corps (IRGC), to head the Supreme National Security Council signals a more hardline stance and fewer concessions, particularly over control of Hormuz. Analysts say the move aims to synchronize military and civilian operations and signals that “Iran believes it holds the upper hand.”

The US has limited options

President Trump on Friday announced plans to formally declare the Strait of Hormuz US territory. Treasury Secretary Scott Bessent also said the US would impose “unprecedented” measures on Iran.

However, Barbara Slavin, a senior fellow at the Stimson Center in Washington, argues the US has little leverage left. Interceptor missile stockpiles are depleted, strategic oil reserves have been drawn down, and key military assets like aircraft carriers have been operating beyond planned schedules. On economic pressure, Tehran has shown it can inflict damage by disrupting traffic through Hormuz.

“Iran is playing tough, clearly angry that the US did not implement the MoU,” Slavin said. She predicted the conflict would be “resolved through an agreement, perhaps after the US midterm elections, when electoral implications diminish.”

Iranian Parliament Speaker Mohammad Ghalibaf said on Saturday that the concessions Iran secured in the MoU were a “source of pride and victory.” “I can say with absolute confidence that we have truly won this war, both militarily and politically,” he said.