US-Iran MoU Expires: Ceasefire Collapse & New Tensions

Ceasefire Framework Collapses as Deadline Passes

A Memorandum of Understanding between the United States and Iran, signed in June to halt months of armed conflict and restore freedom of navigation through the Strait of Hormuz, expired on Monday with no agreement to extend it, no final deal in sight, and both parties accusing the other of having violated its terms almost from the moment of signing.

Iranian Foreign Minister Abbas Araghchi stated on Saturday that Tehran had “not yet made a decision to restart negotiations with the United States,” writing on Telegram as Qatari and Pakistani mediators continued to shuttle messages between the two governments. Araghchi also disclosed that Iran was pursuing a separate arrangement with Oman over new shipping routes through Hormuz — contingent, he stressed, on a political resolution being reached first.

President Donald Trump, addressing supporters in New York on Friday, declared that the United States would soon claim the strait as its own territory. Treasury Secretary Scott Bessent, speaking the same day, warned that Washington would impose economic measures “never before seen” against Iran.

What the Agreement Contained

The MoU was signed on June 17 by Trump and Iranian President Masoud Pezeshkian, following rare high-level talks hosted by Pakistan. It was designed to end more than three months of war that had killed thousands of people and severely disrupted commercial shipping — particularly oil and gas exports — through the Gulf.

The text declared an “immediate and permanent termination of military operations” and stipulated that a “final deal” confirming the permanent end of hostilities on all fronts would be endorsed by the UN Security Council within 60 days, extendable by mutual consent. The agreement also set out terms for halting Israeli attacks on Lebanon, deferring the question of Iran’s nuclear programme to later negotiations.

Under the agreement, the United States committed to ending its naval blockade within 30 days, withdrawing forces from the vicinity of Iran following the final deal, and providing a reconstruction and development package for Iran worth at least $300 billion. Washington further agreed to terminate sanctions, issue waivers for Iranian oil exports, and unfreeze Iranian assets. Iran, in turn, was to clear mines from the Strait of Hormuz and permit vessels to transit without charge for 60 days, while reaffirming that it would not pursue nuclear weapons.

A Deal Disputed Before the Ink Was Dry

Implementation unravelled almost immediately. The two sides produced slightly differing versions of the text, and disagreements quickly emerged over whether the accord constituted a ceasefire or a more permanent settlement, and what obligations each party had actually assumed.

By June 27, Trump was publicly describing Iranian strikes in the region as “a foolish violation” of the deal. Iran countered that US strikes “violate Article 1 of the Memorandum of Understanding.” On July 7, Trump declared the agreement “over,” and US attacks on Iran continued, striking what Tehran described as civilian infrastructure and killing at least 50 people. Iranian officials announced that Washington had “violated and suspended” its commitments, and that Tehran had “likewise suspended all our own commitments.”

The United States has not lifted sanctions on Iran. Trump has publicly dismissed the prospect of paying for Iranian reconstruction, suggesting instead that Tehran compensate families of protesters killed over the past five decades and victims of Iranian-linked attacks abroad. The Strait of Hormuz remains contested: earlier this week the Pentagon confirmed it had fired on a Panama-flagged cargo vessel in the strait for what it described as a violation of the US blockade against Iran.

Mostafa Khoshcheshm, a professor at the University of Applied Sciences in Tehran, told Al Jazeera that the ceasefire had been “rendered obsolete after the US didn’t comply with the terms of the agreement.” He identified the failure to release Iranian assets, lift sanctions, remove the naval blockade, and secure an Israeli withdrawal from southern Lebanon as the central grievances driving Tehran’s position.

Iran Hardens Its Stance

Araghchi argued on Friday, citing the Iranian Students’ News Agency, that the Islamabad MoU was “the end of the war, not a ceasefire,” and that because the US had continued attacks, “there was no 60-day ceasefire that needed to be extended.” The framing reflects a broader Iranian posture: that the expiry of the MoU changes little, since Washington had already rendered it inoperative.

Structural changes within Iran’s security establishment reinforce that reading. Earlier this month, Mohsen Rezaei, former commander of the Islamic Revolutionary Guard Corps, was appointed head of Iran’s Supreme National Security Council, its apex security body. Analysts told Al Jazeera the move is intended to better synchronise military and civilian decision-making. Khoshcheshm said the reshuffle “shows Iran believes it has the upper hand,” and that any future negotiations would see Tehran arrive with expanded demands — including an end to the war in Gaza, the lifting of sanctions on Yemen, and the denuclearisation of Israel.

Iranian Parliament Speaker Mohammad Bagher Ghalibaf told reporters in Tehran on Saturday that the concessions Iran secured in the MoU were “a source of pride and victory.” He added: “I can say with complete conviction that we truly emerged victorious in this war, both militarily and politically.”

Limited Options for Washington

On the US side, the space for escalation has narrowed considerably. Barbara Slavin, a distinguished fellow at the Stimson Center in Washington, DC, told Al Jazeera that Trump has few levers left to pull. Stocks of interceptor missiles have been depleted, strategic oil reserves drained, and aircraft carriers kept at sea well beyond their scheduled rotations. Iran, meanwhile, retains the capacity to impose its own economic costs by disrupting transit through Hormuz.

“Iran is playing hardball here, clearly furious at the Trump administration for, in its view, not fulfilling the MoU signed back in June,” Slavin said. “They’re making the international economy and they’re making Donald Trump sweat.” She assessed that the conflict would ultimately “resolve through a deal, probably after our midterm elections, when there will be less of an impact on the vote,” and that Iran would likely secure significant compensation and substantial influence over the Strait of Hormuz as part of any eventual settlement.

What the expiry of the MoU means in practice remains, for now, a matter of competing interpretations. What is not in dispute is that the framework intended to end one of the most consequential conflicts in the region’s recent history has, at minimum, collapsed — and that neither side has yet identified a credible path toward replacing it.