The text of the MOU will not be released until after it is signed in Geneva on June 19. From news reports, the deal leaves a lot on the table. JD Vance described it as a “very general document.”

Already, different versions are circulating, so it is difficult to know what was resolved.

Trump: The Strait will be opened immediately and permanently Iran: The process of opening the Strait (demining) will be concurrent with negotiations.

Demining operations will begin and the intent is to allow free passage of vessels in the Strait. The Iranian version of the MOU according to their news service Fars, is:

Iran plans to impose fees after that period (60 days), with Fars saying Iran “intends to benefit financially from commercial shipping traffic through the Strait.”

Per Reuters:

“U.S. and Iranian officials say the deal could eventually deliver substantial economic benefits to Iran by lifting sanctions and unfreezing foreign assets. It could also set ​up a $300 billion reconstruction fund, paid for by neighbouring Gulf states that host U.S. military bases and were hit by Iranian attacks during the war.”

The frozen assets has been reported by Iran as 24 billion dollars.

See other details in this link:

US-Iran deal promises end to war but how it will work remains unclear

“Iranian officials, who have always denied intending to build a nuclear weapon, say they have given up little by agreeing to resume diplomatic discussions over Iran’s uranium enrichment programme that were interrupted by the war.”

Prelude to war or peace? We’ll know more on Friday.

Stay tuned,

Dave

Both Iran and the US want a 60-day cease-fire. That’s the easy one. It’s best to call it a cease-fire agreement or an interim agreement or a Memorandum of Understanding (MOU). What appears to be close to done is a very fragile deal. MOU’s are frequently signed by countries to help diplomats bridge differences.

The deal can be a prelude to peace or war. If it is the latter, it will be a highly destructive war with Iran attacking US bases in the region.

I believe at its core, it will be promises of money to Iran (unfreezing of assets) in exchange for passage of ships through the the Strait. Iran is demanding the unfreezing of 24 billion dollars. Iran will not relinquish control of the Strait, but allow the passage of ships. In this way, Iran can declare victory, because this will be a major concession.

It is an agreement which will clarify points of disagreement to be hammered out during the 60 day period. What is still on the table might be more than what the agreement has taken off the table. So, I expect disappointment, rather than relief when the MOU is released.

Iran will promise not to fund terrorist groups. That’s an easy one. They fund Hezbollah, and do not consider it a terrorist group. Iran will promise not to use its uranium to make a nuclear weapon. They’ve agreed to this since the JCPOA. So, the MOU will list points Iran agreed to that have nothing to do with this conflict.

US will agree to end its blockade of Iranian ships in the Persian Gulf. It will not withdraw its 3 to 4 warships in the area, but leave this to further negotiations. Israel will not like the agreement because I believe the language related to reducing their uranium stockpile will not sufficiently specific. Just a lot of good intentions with the details to be worked out later.

In sum, I believe the ability to safely transit the Strait, will be linked to the unfreezing of assets. Bloomberg correctly identifies this as a staged approach, with the 60 day window to work on a more permanent agreement.

No question we are at the crossroads with the outcome depending on how each side judges the outcome of continued war verses compromises to peace.

Stay tuned,

Dave

April 11, It’s 3:40 pm is Islamabad. The reporters covered the US and Iranian delegations arrival to the talks. Pakistan officials met first with the Iranian delegation, then with the US delegation. Reporters stay within walking distance in a separate hotel, and are still very much in the dark.

All eyes are on JD Vance. If he is smart, he won’t say anything of substance. That’s necessary in diplomacy. JD Vance is joined in Islamabad by President Trump’s special envoy, Steve Witkoff, and son-in-law, Jared Kushner. The Iranian delegation, which includes Foreign Minister Abbas Araghchi and Mohammad Bagher Ghalibaf, the speaker of Iran’s Parliament, arrived earlier in the Pakistani capital.

So, it is impossible to say if this is a prelude to peace or a continuation of the war. Will US sit down with their counterparts from Iran, and actually negotiate? So far, Iran has said that any direct meeting will be limited to a one-day event.

The closing of the Strait of Hormuz is creating shortages of jet fuel, which means there will be canceling of flights from Europe. In this environment, bookings will certainly drop. I don’t think airlines can raise rates to cover the cost of increased jet fuel. There is no question that $100 plus oil prices impact the world economy..

So, US and Iran have their list of demands, set out prior to the meeting. See link below. These are 4 areas where compromises will be very difficult.

Strait of Hormuz: Iran wants ​acknowledgment of its authority over the Strait of Hormuz, where it aims to collect transit fees ‌and ⁠control access in what would amount to a huge shift in regional power. The U.S. wants it opened for oil tankers and other traffic without any limitations, including tolls.

Lebanon Issue: Iran wants a ceasefire in Lebanon, where Israeli attacks on ​Iran-backed Hezbollah militants have killed nearly 2,000 people since the ⁠start of the fighting in March. Israel and the U.S. have said the ​Lebanon campaign is not part of the Iran-U.S. ceasefire while Tehran insists it is.

Uranium issue: Iran wants to be allowed to enrich uranium, which Washington has ruled out and President Donald Trump has insisted ​is non-negotiable.

Unblocking of Assets: Iran ​wants the U.S. to unblock Iranian assets and end sanctions that have crippled its economy for years. Washington has indicated that it is open to significant sanctions relief but only ​in exchange for concessions from Iran on its nuclear and missile programmes.

The US froze 2 billion dollars of Iranian assets. I assume they were deposited in US banks. Worldwide it is estimated that 100 to 120 billion dollars are frozen by other countries. When Trump made his primetime broadcast on April 1 to the nation, he slammed Obama for “giving” Iran 1.7 billion dollars as follows:

“Obama gave them $1.7 billion in cash. Green, green cash. Took it out of banks from Virginia, D.C. and Maryland. All the cash they had, flew it by airplanes in an attempt to buy their respect and loyalty. But it didn’t work. They laughed at our president and went on with their mission to have a nuclear bomb”

Fact checkers immediately caught this lie. Nothing was ever given to Iran. This was their money that wasreturned to Iran. They paid $400 million dollars for military equipment in 1979 or before, and never received the equipment. So, these funds were for the return of 400 million dollars plus interest (1.3 billion dollars). I calculated the interest rate was about 4%. Trump went on primetime television, to promote a long series of lies.

Trump is in a bind of epic proportions. I listed four issues where Iran and the US are far apart. The AP article lists 3 more issues: (1) Iran wants compensation for the destruction that US has caused, (2) Iran wants withdrawal of US forces from the areaa and a permanent cease-fire while the US insists it will not withdraw, and will escalate the hostilities if the negotiations fail. (3) Israel and the U.S. both want Iran’s missile capabilities ​to be ⁠dramatically curtailed. Tehran has said its formidable missile arsenal is non-negotiable.

What are the main talking points at the US-Iran negotiations in Pakistan?

Exclusive: Iranian source says US has agreed to unfreeze Iranian funds, Washington denies it

So, the negotiations are scheduled to last two weeks. They can always extend this time.

Stay tuned,

Dave