Jul 10, 2026 19:12 pm IST

Opinion | US-Iran MoU Collapse: Why The Strait Of Hormuz Is Back On The Brink

Why did the ceasefire fail? Could it have been prevented? The answer to many of these questions lies in the framing of the 14-Point MoU and the uneven playfield that it created.

Col (Retd) Rajeev Agarwal Col (Retd) Rajeev Agarwal Columnist

Col (Retd) Rajeev Agarwal Columnist

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........

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