For all practical purposes, the US-Iran Memorandum of (Mis)Understanding is over. The dispute over how to manage the Strait of Hormuz in the interim has pushed the two sides back into open war. But to what end?

There is little reason to believe another round of fighting can alter the fundamentals enough to change the reality from which the two sides must ultimately negotiate. If they are fortunate, the MOU’s collapse may yield another round of talks in which the allure of reshaping facts on the ground through force has finally faded.

As I have written elsewhere, the dispute over the Strait turns, at least on the surface, on Paragraph 5 of the MOU: whether Iran is responsible for safe passage throughout the Strait for the duration of the agreement, or only for the waterway’s northern corridor.

Beneath the surface, however, lies a more fundamental strategic disagreement. Even before the MOU was signed, Tehran believed Washington's objective was to establish a southern shipping corridor through Omani waters that would gradually erode Iran's control over the Strait. Such a corridor would require Oman's cooperation, which may explain why Trump at one point threatened to bomb Oman unless it abandoned its proposal for joint management of the Strait, with administrative fees collected by Muscat and Tehran.

The corridor would remain operational even if war resumed and Iran sought once again to close the Strait. From Tehran's perspective, Washington used the MOU to strengthen this alternative route, and the US military's escort of commercial shipping without coordinating with Iran marked a significant step in that direction. If successful, the strategy would deprive Iran of its most important source of leverage — which is precisely why it appeals to Washington.

This is why Tehran has insisted that all ships transiting the Strait — regardless of the corridor they use — coordinate with Iran, consistent with its reading of Paragraph 5 of the MOU. Washington, by contrast, argues that the MOU merely assigns Iran responsibility for ensuring the safe passage of commercial vessels, without granting it operational control over all maritime traffic.

Before the funeral of former Supreme Leader Ayatollah Khamenei, the two sides explored a compromise under which ships would coordinate their transit with both Iran and a designated Gulf Cooperation Council (GCC) state. As I wrote in my Substack, “Under such an arrangement, ships would notify Tehran while also reporting to a GCC maritime authority, balancing Iran's demand for oversight with Washington's desire to avoid granting Tehran exclusive control.” But no agreement was reached before diplomacy was suspended for the duration of the funeral.

Accounts of what transpired in Muscat over the weekend naturally differ, but three proposals emerged. Iran advanced a variation of the earlier compromise: a dual-notification system for all vessels transiting the Strait. Qatar proposed three channels—an Iranian corridor in the north, an Omani corridor in the south, and a neutral corridor in the middle. For Tehran, this was a nonstarter, as it would effectively restore the Strait to its pre-February status.

According to Tehran, the United States and Oman favored separate management of the Iranian and Omani corridors: Iran could require coordination for vessels using its corridor, while Oman's would remain unrestricted.

Tehran saw this as an attempt to formalize what it had long suspected was Washington's strategy: creating a southern corridor through the Strait beyond Iran's influence, leaving Tehran no means of challenging it short of war with Oman. Iran also contends that Muscat advanced the proposal only under intense US pressure, noting that Oman had previously supported a joint management system.

Washington disputes this account. US officials maintain they were open to several arrangements, provided commercial vessels could transit the Strait safely. According to the American version, the talks unraveled only after Iranian Foreign Minister Abbas Araghchi consulted Tehran regarding a joint Iranian-Omani statement declaring the Strait open. From Washington's perspective, negotiations had been progressing until Araghchi was overruled by hardliners in the IRGC, who chose confrontation over compromise.

Whether such a fracture proved decisive in this instance is unclear. What is clear is that the........

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