Washington’s Exit Strategy from Iran

On Wednesday, June 17, 2026, U.S. President Donald Trump and Iranian President Masoud Pezeshkian digitally signed a memorandum of understanding (MoU) intended to end the war between the United States and its allies on one side, and Iran and its allies on the other. 

The MoU came after more than two months of negotiations following the ceasefire that Washington announced on April 8 to allow for a negotiated settlement to the war that the U.S. and Israel had launched against Iran on February 28. Trump described the agreement as a “major win” for the United States and argued that it had prevented a “worldwide depression” by reopening the Strait of Hormuz. Vice President J. D. Vance said the 60-day negotiating period had begun, and pointed to the renewed passage of oil tankers through the Strait of Hormuz as evidence that the agreement was already taking effect.

Yet this official presentation obscures more than it reveals. A closer reading of the MoU suggests that it is not a roadmap toward a final peace settlement with Iran, but an American exit strategy from a war that failed to improve Washington’s negotiating position. Far from forcing Iran to retreat from its pre-war positions, the conflict left Washington returning to negotiations under less favourable conditions than those that existed before the war began. Wars are ultimately judged not only by military operations but by the political settlements they produce. 

The Struggle over the MoU

The MoU was the product of a tense struggle over its terms from the moment the ceasefire was declared. Through Pakistani mediation, the U.S. put forward a 15-point plan to end the hostilities and move toward a permanent settlement. The plan proposed that the war could end if Iran accepted several U.S. conditions: no Iranian nuclear weapon, no domestic uranium enrichment, the transfer or removal of enriched uranium, expanded IAEA monitoring, the reopening of the Strait of Hormuz, limits on Iran’s missile program, and an end to Iranian support for its regional allies. In return, Washington would offer sanctions relief.

For its part, Iran responded with its own 10-point proposal. Tehran demanded a non-aggression guarantee, recognition of Iran’s role in the Strait of Hormuz, acceptance of enrichment on Iranian soil, the lifting of U.S. and international sanctions, an end to the war on all fronts including Lebanon, compensation for war damages, the release of frozen assets, and a binding UN Security Council resolution. Iran also insisted that its missile program was non-negotiable and that its regional allies were not concessions to be traded away.

The April 11–12 Islamabad talks between U.S. Vice President J. D. Vance and Iran’s parliamentary speaker, Mohammad Bagher Ghalibaf, failed to produce an agreement. Washington responded by imposing a maritime blockade on traffic entering and leaving Iranian ports. Trump made clear that the blockade would remain in place until an agreement was finalized, saying it would “remain in full force and effect until an agreement is reached, certified, and signed.”

Yet the blockade failed to force Iran to yield. Instead, the dispute over the conditions for ending the war repeatedly pushed the ceasefire to the brink of collapse, with clashes in the Strait of Hormuz, Iranian attacks on U.S. interests in the Gulf, Israeli bombardment of southern Beirut, Iranian missile fire on Israel, and further U.S. retaliation. By June 10, Trump was still threatening additional strikes, while Pete Hegseth said U.S. forces would carry out nightly attacks on “key facilities” in Iran.

Then, abruptly, the tone changed. On June 11, Trump cancelled planned strikes against Iran, claiming that discussions had reached the highest levels of Iranian leadership and that the “final points” of a potential agreement had been approved. Later that day, he said, “We just made a great settlement of the war with Iran,” and claimed that the documents were in “pretty final shape.”

What Washington Wanted and What It Got 

However, a close look at the memorandum suggests that the U.S. was eager to secure an agreement. Many of its provisions reflect Washington’s failure to move Iran away from positions it had already declared before and during the war. More importantly, several of these provisions represent gains for Iran, especially given that the war had been intended either to bring about regime change or, at minimum, to break Iran’s will and force it into submission on the nuclear file, its missile program, and its support for regional allies.

To begin with, the memorandum is not a final settlement. It sets out both the issues to be addressed in the next round of talks and the immediate steps required to make those talks possible. That distinction matters. The MoU does not mention Iran’s missile program or its support for regional allies. Accordingly, those issues have been removed from the negotiating agenda.

The nuclear file is treated differently, but only narrowly. Article 8 is the sole provision dealing directly with Iran’s nuclear program, and even there the issue is not resolved. Instead, the article records Iran’s commitment not to “procure or develop nuclear weapons,” then leaves the fate of Iran’s stockpiled enriched material to a mutually agreed mechanism, with on-site down-blending under IAEA supervision as the minimum method. It also postpones questions of enrichment and Iran’s broader nuclear needs to the framework of a final agreement.

This language is significant. Discussion of enrichment does not mean zero enrichment, as many U.S. officials demanded during the war. Nor does it mean dismantling Iran’s nuclear program, or transferring Iran’s stockpile of 60-percent enriched uranium to the U.S., as Trump had repeatedly demanded. In fact, Article 8 points in the opposite direction: it allows for the down-blending of enriched uranium inside Iran, under IAEA supervision.

The problem for Washington is that these were not new issues. Questions surrounding enrichment, stockpiles and inspections had already been central to previous negotiations, including the Joint Comprehensive Plan of Action (JCPOA). Rather than creating a new framework, the memorandum returns Washington and Tehran to disputes that have remained unresolved for years.

The remaining articles of the MoU either provide Iran with immediate gains or offer benefits tied to the conclusion of a final agreement. Articles 1 and 2 commit both sides not to initiate military operations, threaten force, or violate each other’s sovereignty. More importantly for Iran, Article 1 extends the cessation of military operations to “all fronts, including Lebanon.” That language mattered because it inserted Lebanon into the ceasefire framework, even though Israel continued to view Lebanon as a separate security front.

Article 4 requires the U.S. to begin removing its maritime blockade immediately and end it within 30 days. Article 5 requires Iran to arrange safe commercial passage through the Strait of Hormuz without charge for 60 days. Yet it also allows Iran to discuss the future administration and maritime services of the strait with Oman and other littoral states. The irony is clear: before the war, Hormuz was open and free of such charges; the war created the conditions under which Iran could claim a future role in managing and charging for passage.

The memorandum also proposes a reconstruction and economic development plan for Iran worth at least $300 billion, to be developed by the United States and regional partners. This benefit, however, is tied to the final agreement. Article 7 similarly commits the United States to terminating all sanctions against Iran, including UN Security Council resolutions, IAEA Board of Governors resolutions, and all unilateral U.S. sanctions, both primary and secondary, according to a schedule to be agreed in the final deal. Article 9, meanwhile, preserves the status quo during the negotiating period: Iran maintains the current status of its nuclear program, while the United States imposes no new sanctions and deploys no additional forces in the region.

Perhaps the most important immediate gains for Iran are found in Articles 10 and 11. Article 10 states that, immediately upon signing the MoU and until sanctions are terminated, the U.S. Treasury Department will issue waivers for the export of Iranian crude oil, petroleum products, derivatives, and related services, including banking, insurance, and transportation. This means that Iran would no longer have to rely exclusively on sanctions-evading oil sales at discounted prices. It could begin selling oil more openly and closer to market conditions, as long as the waivers remain in effect.

Article 11 commits the United States to making Iran’s frozen or restricted funds fully available for use. This clause was one of the main obstacles delaying the agreement. Iranian negotiators reportedly demanded immediate access to $12 billion in frozen assets held in Qatar, with another $12 billion to be released during the negotiating period. Whether facilitated through Qatar as reported or another mechanism, the political significance was clear: Iran was to regain access to funds that had been frozen or restricted before the war.

The remaining articles — 12, 13, and 14 — are largely technical. They establish a mechanism to monitor implementation, sequence the beginning of final-deal negotiations after implementation of the ceasefire, blockade, Hormuz, oil-waiver, and frozen-assets provisions, and provide that the final agreement will be endorsed by a binding UN Security Council resolution.

Seen against the United States’ initial 15-point proposal, the significance of the MoU becomes clearer. Washington’s core demands — zero uranium enrichment, the transfer of highly enriched uranium to the United States, restrictions on Iran’s missile program, and an end to Iranian support for its regional allies — all disappeared from the memorandum. By contrast, several of Iran’s demands were incorporated into the text: lifting the maritime blockade, issuing oil waivers, releasing frozen funds, recognizing Iran’s role in the future administration of the Strait of Hormuz, and funding Iran’s reconstruction. Iran’s only real concession was temporary: it agreed to allow free passage through the Strait of Hormuz for 60 days without imposing the charges it had threatened during the war.

The central question, therefore, is this: why did the United States offer these concessions in exchange for reopening a strait that had already been open before the war, and for returning to negotiations over a nuclear file that had already been under negotiation before the war began?

Exiting the Quagmire

By early June, Washington had reached the conclusion that further bombardment of Iran would not improve its position. Trump had threatened to target Iran’s economic infrastructure, but such escalation was unlikely to force Tehran into submission. Iran had already warned that attacks on its civilian infrastructure would be met by retaliation against U.S.-aligned interests in the Gulf, including energy, desalination, and critical economic infrastructure. Continuing the war therefore risked dragging the United States into a prolonged conflict with no realistic exit.

Indeed, several indicators suggest that the MoU was less a genuine roadmap toward a comprehensive peace with Iran than an American exit strategy from an increasingly untenable war.

By June, military pressure offered little prospect of producing additional concessions from Tehran. Efforts to restore commercial traffic through the Strait of Hormuz faced persistent Iranian resistance, while continued escalation risked expanding the conflict without resolving the underlying disputes.

At the same time, regional states increasingly sought to insulate themselves from the conflict. Gulf governments that had attempted to avoid the war from the outset appeared more concerned with preventing further escalation than supporting a prolonged confrontation. These dynamics reinforced the incentives for Washington to pursue an agreement rather than continued military escalation.

To this we can add the domestic political dimension. The war had become increasingly unpopular in the United States and was creating pressure even within Trump’s own Republican coalition. A CBS News/YouGov poll conducted on June 17–19 found that 78 percent of Americans believed the United States should end the conflict with Iran immediately, including 60 percent of Republicans. By moving to end the war, Trump was not only containing a foreign-policy crisis but also responding to growing domestic pressure to avoid a prolonged conflict.

Taken together, these developments suggest that the memorandum functioned less as a roadmap to peace than as a mechanism for de-escalation. Yet one should be cautious about treating it as the foundation of a durable settlement with Iran.

The MoU also faces many potential spoilers. The Trump administration is already facing opposition from hawks within the Republican Party. Tom Cotton warned that parts of the agreement moved “in the wrong direction,” Ted Cruz called giving billions to Iran “an exceptionally bad idea,” Roger Wicker opposed lifting sanctions and unfreezing Iranian funds, and Bill Cassidy described the agreement as “the worst foreign policy blunder in decades.”

Israel, too, considered itself not a party to the MoU and viewed it with deep concern. Its objections centered on three issues: the agreement did not address Iran’s missile program or support for regional allies; it linked the ceasefire to Lebanon, constraining its freedom of action against Hezbollah; and it offered Iran sanctions relief and economic benefits rather than forcing the kind of Iranian submission Israel had hoped the war would achieve. The first round of U.S.–Iran talks in Switzerland, scheduled for June 18, 2026 to begin implementing the MoU, was postponed after Israel escalated its bombardment of Lebanon while maintaining that it retained the right to continue military operations against Hezbollah. Iran then reclosed the Strait of Hormuz until the ceasefire in Lebanon was implemented.

Conclusion

The significance of the memorandum lies less in what it resolved than in what it revealed. Washington entered the conflict seeking major concessions on Iran’s nuclear program, regional influence and strategic posture. The agreement that emerged achieved none of those objectives in a decisive way. Instead, it restored negotiations, reopened the Strait of Hormuz and provided Washington with a pathway out of a conflict that had become increasingly costly and difficult to sustain.

This does not mean a final settlement is impossible. It does mean that the central disputes remain unresolved. Questions surrounding enrichment, sanctions relief, regional security arrangements and the future of Iran’s nuclear program have largely been deferred rather than settled. The memorandum may therefore prove successful as a mechanism for de-escalation while falling short of the comprehensive peace agreement that its supporters envision.