The Iran War, which began with the surprise airstrikes by Israel and the United States on February 28, came to a close after 107 days with the signing of the Islamabad Memorandum of Understanding (MoU) between the United States and Iran on June 14. Although President Donald Trump announced a two-week ceasefire on April 8, intermittent fighting continued in both the Persian Gulf and Lebanon. In particular, Iran's blockade of the Strait of Hormuz and the U.S. counter-blockade imposed enormous economic costs on the global economy.

The signing of the MoU does not formally end the war. Nevertheless, it marks a transition from military confrontation to diplomacy. Since neither Washington nor Tehran appears willing to resume hostilities, the likelihood of another full-scale war remains low even if future negotiations encounter difficulties. The MoU instantly pushed global oil prices down to around $80 per barrel, easing market anxiety and fostering renewed confidence in the global economic recovery. At the same time, however, it has been widely criticized for effectively formalizing an American defeat in the war.

The MoU was initially signed electronically on June 14, President Trump's birthday, by President Trump, U.S. Vice President J.D. Vance, and Iranian Parliament Speaker Mohammad Bagher Ghalibaf. It formally entered into force on June 17 following the signatures of President Trump and Iranian President Masoud Pezeshkian. A formal signing ceremony, attended by representatives of the United States, Iran, and the mediating countries of Pakistan and Qatar, had originally been scheduled for June 19 at the Swiss resort of Bürgenstock. However, after a draft of the MoU was leaked to the press, the parties decided to accelerate the signing process, apparently in an effort to reopen the Strait of Hormuz as quickly as possible. The second round of high-level negotiations, originally scheduled for June 19 following the first round on April 12, was postponed for two days because of Israeli airstrikes in southern Lebanon and was ultimately held on June 21.

This article examines each article of the MoU to assess whether the agreement is more favorable to the United States or Iran. Thereafter, it analyzes the strategic significance of the U.S. counter-blockade as Washington's principal bargaining tool, forecasts the course of negotiations over the next 60 days, and draws implications for upcoming U.S.-North Korea dialogue.

| Analysis of the Memorandum

The MoU consists of fourteen articles.¹⁾ The text of each article is presented first, followed by an analysis of its meaning and implications. A table is also provided to assess whether each provision is more favorable to the United States or Iran. Two important issues omitted from the MoU are also examined in order to provide an overall assessment of the agreement.

Article 1. <Termination of the War>: The United States of America and the Islamic Republic of Iran and their allies in the current war by signing this MoU, declare the immediate and permanent termination of military operations on all fronts, including in Lebanon, and undertake from now on not to initiate any war or any military operation against each other, and to refrain from the threat or use of force against each other, and ensuring the territorial integrity and sovereignty of Lebanon. Final deal will confirm the permanent termination of the war on all fronts, including in Lebanon, and other provisions of this paragraph.

<Analysis>: This provision declares a complete end to the war not only in the Persian Gulf but also in Lebanon. Its explicit emphasis on respecting Lebanon's sovereignty and territorial integrity is particularly noteworthy. By prohibiting the use of force in Lebanon, where Hezbollah maintains its stronghold, the provision runs directly counter to Israel's security interests. The second round of high-level negotiations, which had been postponed after Iran protested Israel's military operations in southern Lebanon, was eventually held on June 21. Israel currently occupies a buffer zone extending approximately 8 to 10 kilometers to the north of the border. Whether Article 1 requires not only an end to the use of force in Lebanon but also the complete withdrawal of Israeli forces is likely to become a major point of contention. Prime Minister Benjamin Netanyahu has maintained that Israeli forces cannot withdraw until Hezbollah is disarmed.

Article 2. <End of Hostile Relations>: The United States of America and the Islamic Republic of Iran undertake to respect each other's sovereignty and territorial integrity and to refrain from interfering in each other's internal affairs.

<Analysis>: This article represents a political and diplomatic declaration aimed at ending the hostile relationship that has existed since 1979 and opening a new chapter in U.S.-Iran relations. Ahead of the second round of high-level negotiations in Switzerland on June 21, Vice President Vance expressed the administration's commitment to normalizing relations with Iran:²⁾

What the president has asked us to do is turn over a new leaf to transform our relationship with the people of Iran, and to extend an outstretched hand that says to the people of Iran that if your leadership is willing to give up being a driver of regional instability; If they are willing to give up nuclear weapons ambitions for the long term, then the United States is willing to fundamentally transform our relationship with that country; That is certainly our goal.

This provision opens the possibility for Iran to shed its long-held designation as a state sponsor of terrorism and emerge as a normal member of the international community. At the same time, however, the commitment to non-interference makes it considerably more difficult for the United States to raise issues related to Iran's democratization or human rights. It must be an apparent disappointment for many Iranians who had hoped for political change and regime transformation.

Article 3. <Negotiation Period>: The United States of America and the Islamic Republic of Iran commit to negotiating and achieving the final deal in maximum 60 days, extendable with mutual consent.

<Analysis>: The decision to conduct negotiations for sixty days, from June 17 to August 15, with the option of extending the deadline by mutual agreement, reflects the recognition that the issues involved are too complex to resolve within two months. Under Article 13, implementation of Article 1 (termination of the war), Article 4 (termination of the U.S. counter-blockade), Article 5 (termination of Iran's blockade), Article 10 (temporary priority sanctions waivers), and Article 11 (release of frozen assets) begins immediately. Considerable time and effort will therefore be required to negotiate the remaining issues, particularly Article 6 (reconstruction fund), Article 7 (comprehensive sanctions relief), and Article 8 (the nuclear issue).

Article 4. <Termination of the U.S. Counter-Blockade>: Immediately upon the signing of this MoU, the United States of America will begin the removal of its naval blockade and any disturbances or impediments against the Islamic Republic of Iran, and will fully end the naval blockade within 30 days. During this period, the traffic of vessels will be in proportion to the numbers of pre-war traffic being restored by the Islamic Republic of Iran. The United States of America further undertakes to remove its forces from the proximity of the Islamic Republic of Iran within 30 days after the final deal.

<Analysis>: The lifting of the U.S. counter-blockade restores freedom of navigation between the Strait of Hormuz and the Gulf of Oman. It remains unclear, however, whether the commitment to withdraw U.S. forces from areas adjacent to Iran applies only to the approximately 50,000 personnel and two carrier strike groups deployed for the counter-blockade or also includes U.S. military bases and forces stationed in Saudi Arabia, Kuwait, Bahrain, Qatar, and the United Arab Emirates. Washington would presumably interpret the provision as excluding its previous military presence in the Gulf, but the wording of the agreement is sufficiently ambiguous that it could become a subject of future dispute.

Article 5. <Termination of Iran's Blockade>: Upon the signing of this MoU, the Islamic Republic of Iran will make arrangements using its best efforts for the safe passage of commercial vessels with no charge for 60 days only from the Persian Gulf to the Sea of Oman and vice versa. The traffic of commercial vessels will immediately start, and considering the need for removing the technical and military obstacles and demining by the Islamic Republic of Iran, will be instated within 30 days. The Islamic Republic of Iran will conduct dialogue with the Sultanate of Oman to define the future administration and maritime services in the Strait of Hormuz in discussion with other Persian Gulf littoral states in line with the applicable international law and the sovereign rights of coastal states of the Strait of Hormuz.

<Analysis>: Iran agreed to lift its blockade within thirty days, taking into account the time required for mine clearance and other technical measures, and to restore the normal passage of commercial vessels. Article 5 raises two major issues. First, by referring specifically to commercial vessels, the provision could imply future restrictions on the passage of U.S. naval vessels and cast uncertainty over the future role of the U.S. Fifth Fleet based in Bahrain. Second, while commercial vessels will be exempt from charges for the first sixty days, the provision states that a new framework for managing the Strait will be established in consultation with the littoral states and Oman thereafter, making it likely that some form of fee will eventually be introduced. Given that Iran's Supreme Leader and other senior officials consistently emphasized throughout the negotiations that exercising sovereignty over the Strait of Hormuz was a core national objective, the substance of Article 5 is not particularly surprising. President Trump, however, repeatedly insisted that there would be no toll fee. It is therefore unlikely that any future charge would simply take the form of a fee paid solely for the right of passage.

Iranian officials have recently indicated that charges could instead be imposed for services such as environmental management, navigational guidance, medical assistance, and other maritime support services in the Strait. Omani officials, who have been consulting with Iran on this issue, likewise maintain that while a transit toll would be inappropriate, a temporary service charge for the provision of such services could be acceptable. Immediately after the signing of the MoU, the two countries agreed to establish a joint committee to discuss the future management of the Strait, the provision of maritime services, and the collection of related charges.³⁾ The amount of any service charge and the period during which it may be collected are therefore likely to become key issues in future negotiations. By way of comparison, the Turkish government collects approximately $250 million annually in service charges for navigational aids, emergency rescue operations, medical assistance, and related services provided to vessels transiting the Bosporus Strait in Istanbul.

Article 6. <Reconstruction Fund>: The United States of America undertakes with regional partners to develop a definitive, mutually agreed plan with at least $300 billion for the reconstruction and economic development of the Islamic Republic of Iran. The mechanism for the implementation of this plan will be finalized as part of a final deal within 60 days. All required licenses, waivers and permissions needed for the relevant financial transactions will be granted by the United States of America.

<Analysis>: Although the United States maintains that the reconstruction fund does not constitute compensation for war damage and that the U.S. government itself will make no direct financial contribution, the fund is, in substance, compensation for the destruction caused by the war. From the outset of the negotiations, Iran insisted that the conflict could not be brought to an end unless it received compensation for the damage inflicted by what it described as an unjust and unlawful war. Early estimates put reconstruction costs at between $270 billion and $300 billion, with the rebuilding process expected to take 12 to 15 years. During the negotiations, Iran reportedly demanded $400 billion. The figure of "no less than $300 billion" therefore appears to represent a compromise between the two sides, with some reports suggesting that the actual agreed amount is $350 billion.⁴⁾ President Trump has argued that the fund will be financed primarily through private investment by the Gulf oil-producing states and major companies in Europe and Asia. Even if private firms provide most of the funding, however, the essential character of the fund as compensation for wartime damage does not change.

The establishment of a reconstruction fund for war damage is not merely an economic issue; it is also an important indicator in assessing the international legal and moral legitimacy of a war. For that reason, Article 6 is likely to become a significant political issue within the United States and a major burden for the Trump administration. More broadly, the provision lends support to the argument that the Iran War was a preventive war launched without sufficient legal or political justification and in violation of international norms.⁵⁾

Article 7. <Comprehensive Sanctions Relief>: The United States of America undertakes to terminate all types of sanctions against the Islamic Republic of Iran, including the United Nations Security Council resolutions, i.e. IAEA [International Atomic Energy Agency] Board of Governors resolutions and all unilateral U.S. sanctions, primary and secondary, in an agreed-upon schedule as part of the final deal. The Islamic Republic of Iran and the United States of America acknowledge the critical importance of the sanctions-termination issue above mentioned, and expressed their intentions to immediately address these issues in the negotiations, in order to achieve mutual agreement on them.

<Analysis>: This provision calls for the comprehensive removal of all sanctions imposed on Iran over the past several decades on grounds including support for terrorism, human rights violations, and nuclear development. Together with Article 2, which provides for the normalization of relations, it opens the way for Iran to reemerge as a fully recognized member of the international community.

Provided that Iran faithfully complies with the commitment under Article 8 to refrain from developing nuclear weapons, it could emerge as the dominant regional power in the Middle East, supported by its vast territory, a population of approximately 93 million, and abundant energy resources. In light of Article 2, domestic political issues, including the repression of political dissidents, are unlikely in themselves to prevent Iran's international rehabilitation. Nevertheless, if Iran were to resume support for terrorist organizations or continue overt assistance to groups such as Hezbollah or the Houthis, new sanctions could still be imposed.

Article 8. <The Nuclear Issue>: The Islamic Republic of Iran reaffirms that it shall not procure or develop nuclear weapons. The United States of America and the Islamic Republic of Iran have agreed to resolve the disposition of stockpiled enriched material, pursuant to a mechanism that will be mutually agreed upon in accordance with the schedule mentioned in paragraph seven, with the minimum methodology to be downblending on site under the supervision of the IAEA. The two parties also agreed to discuss the issue of enrichment and other mutually agreed matters related to the Islamic Republic of Iran's nuclear needs based on a satisfactory framework being agreed upon in the final deal. The final deal will confirm the provisions of this paragraph. The United States of America and the Islamic Republic of Iran acknowledge the critical importance of the nuclear issues above mentioned and express their intention to immediately address these issues in the negotiations in order to achieve mutual agreement on them.

<Analysis>: Iran currently possesses approximately 9,000 kilograms of enriched uranium, including roughly 2,000 kilograms enriched to 20 percent and about 450 kilograms enriched to 60 percent. The central issues in the nuclear negotiations are how to deal with the stockpile of highly enriched uranium and whether Iran will retain the right to continue uranium enrichment. The United States initially sought not only to remove the entire stockpile of 450 kilograms of highly enriched uranium but also, following the Libyan model, to dismantle and remove Iran's uranium enrichment facilities altogether. Iran, however, refused to compromise, maintaining that uranium enrichment is a matter of national sovereignty and that its stockpile of highly enriched uranium constitutes a national asset.

As a result, Article 8 largely reflects Iran's position. Detailed negotiations over the process of diluting highly enriched uranium to low-enriched levels are likely to become a major point of contention in the next phase of the talks. Since negotiations on the Joint Comprehensive Plan of Action (JCPOA) concluded under the Obama administration in 2015 required twenty months, most experts expect the current negotiations to extend well beyond the initial sixty-day timetable. In particular, the duration of any suspension of Iran's enrichment activities and the scale of the enrichment infrastructure that Iran will be permitted to retain during that period are likely to become key issues. One disappointing aspect of the agreement is that the negotiations failed to secure from Iran's new Supreme Leader a religious decree (fatwa) reaffirming the prohibition on nuclear weapons, similar to the one previously issued by the late Supreme Leader Ali Khamenei.

Article 9. <Maintenance of the Status Quo>: Pending the final deal, the United States of America and the Islamic Republic of Iran agree to maintain the status quo. The Islamic Republic of Iran will maintain the current status quo of its nuclear program, and the United States of America will not impose any new sanctions and will not deploy additional forces in the region.

<Analysis>: This provision commits both parties to maintaining the existing situation between the signing of the MoU and the conclusion of the final agreement. During this period, both sides agree to refrain from activities that the other considers particularly sensitive, including expanding Iran's nuclear program, imposing additional sanctions, or increasing military deployments.

Article 10. <Temporary Priority Sanctions Waiver>: The United States of America undertakes that immediately upon the signing of this MoU until the termination of sanctions, the U.S. Department of Treasury will issue waivers for the export of Iranian crude oil, petroleum products and derivatives, and all associated services, including banking transactions, insurances, transportation, etc.

<Analysis>: Although Article 4 lifts the U.S. counter-blockade and Article 7 commits the United States to comprehensive sanctions relief, implementing those commitments through the necessary legal and administrative procedures will inevitably require time. Article 10 therefore provides for temporary sanctions waivers to ensure that Iran can immediately resume normal oil exports and related commercial activities pending the formal termination of sanctions. As a result, Iran effectively regained the ability to conduct international trade immediately upon the signing of the MoU.

Article 11. <Release of Frozen Assets>: The United States of America undertakes to make fully available for use the frozen or restricted funds and assets of the Islamic Republic of Iran upon the implementation of this MoU. The United States of America and the Islamic Republic of Iran will mutually agree on the procedures related to the release of these funds during the negotiations. Such funds, either retained in the original account or transferred, shall be made fully usable for payment to any ultimate beneficiary designated by the Central Bank of the Islamic Republic of Iran. The United States of America undertakes to issue all necessary licenses and authorizations accordingly.

<Analysis>: Iran is currently not permitted to get access to approximately $100 billion in export earnings, including oil revenues, frozen overseas as a result of various sanctions. Of that amount, roughly $24 billion is reportedly held in Qatar. During the negotiations, reports indicated that the United States agreed, as a confidence-building measure, to release $12 billion of those funds. South Korea's $6 billion in payments for Iranian crude oil, which had been frozen in Qatari banks, was reportedly released first, although it may be used only to purchase U.S. goods.⁶⁾ Additional frozen assets are expected to be released gradually as the negotiations progress.

President Trump repeatedly criticized the Obama administration for airlifting $1.7 billion in cash to Iran during the JCPOA negotiations and insisted that his administration would not make any cash payments to Tehran. Consistent with that position, Article 11 does not provide for direct cash transfers to Iran. The Qatari government has likewise stated that the $24 billion under its control will not be released in cash but will instead be made available as credit that Iran can use to purchase goods. It is therefore unlikely that the remaining frozen assets will be transferred directly as cash, either.

Article 12. <Establishment of an Implementation Mechanism>: The United States of America and the Islamic Republic of Iran agree that an executive mechanism will be established to monitor the successful implementation of this MoU and the future compliance of the final deal.

<Analysis>: Major international agreements commonly establish dispute resolution or monitoring bodies to supervise implementation and resolve compliance disputes. The size, composition, representation, and operating procedures of the implementation mechanism will need to be negotiated. In practice, it will function as the executive body responsible for carrying out the directives of the presidents of the United States and Iran.

Article 13. <Phased Negotiations>: After signing this MoU and subject to the beginning of the implementation of paragraphs 1, 4, 5, 10 and 11 of this MoU and the continuing implementation of these measures, the United States of America and the Islamic Republic of Iran will start negotiations regarding the final deal exclusively on the other paragraphs.

<Analysis>: This provision establishes the termination of the war (Article 1), the lifting of the U.S. counter-blockade (Article 4), the lifting of Iran's blockade (Article 5), the temporary priority sanctions waiver (Article 10), and the release of frozen assets (Article 11) as the initial issues to be implemented before negotiations on the remaining provisions proceed. From the outset, Iran insisted that the negotiations should be conducted in two phases and that the nuclear issue, which was of primary concern to the United States, should be addressed only in the second phase. Article 13 therefore reflects Iran's negotiating position almost in its entirety. The nuclear issue, together with the remaining outstanding issues, will be negotiated during the second phase.

Article 14. <Ensuring International Legal Guarantee>: The final deal will be endorsed by a binding UNSC [U.N. Security Council] resolution.

<Analysis>: Iran maintained throughout the negotiations that any agreement with the United States must be backed by an international legal guarantee. Having been subjected to surprise attacks during both the Twelve-Day War of June 2025 and the Forty-Day War of February 2026 while nuclear negotiations with the United States were underway, Tehran refused to compromise on this point. Article 14 faithfully reflects Iran's position and represents a significant concession by the Trump administration, which has generally placed little importance on the United Nations and the Security Council. Approval by the Security Council would give the final agreement binding force under international law, thereby strengthening confidence that its provisions will be implemented as agreed. Since the implementation mechanism established under Article 12 would derive its authority from a Security Council resolution, it would possess a fundamentally different legal status and institutional authority from the Board of Peace, which President Trump established unilaterally to end the war in Gaza and oversee postwar reconstruction.

Two Major Omissions: Ballistic Missiles and Proxy Forces

Restricting Iran's ballistic missile capabilities and ending its support for proxy groups such as Hezbollah and the Houthis were among the principal demands of Israel and the Gulf states. During the war, Iran demonstrated the effectiveness of its medium-range ballistic missiles by striking not only the Gulf states but also Israel. At the same time, Hezbollah intensified pressure on Israel from southern Lebanon, while the Houthis launched attacks against Israel and threatened to blockade the Bab el-Mandeb Strait. Iran would likely have rejected any restrictions on its ballistic missile program on the grounds that such capabilities are essential to its national deterrent. It also appears to stick to the principle that its bilateral relations with proxy forces should not be a subject of the negotiations. By failing to secure even limited concessions from Iran on either issue, the United States has effectively allowed Iran to retain its ability to project military power against neighboring countries, including Israel. Conversely, this outcome is also likely to undermine the confidence of U.S. allies in Washington's security commitments.

​

As Table 1 demonstrates, it is reasonable to conclude that the MoU overwhelmingly favors Iran. Excluding the three provisions for which it is difficult to determine which side benefited more, Iran secured the more favorable outcome in all of the remaining thirteen provisions. Republican Senator Bill Cassidy sharply criticized the agreement, remarking that Ronald Reagan, who had negotiated so effectively with Mikhail Gorbachev, must be turning in his grave, and describing it as one of the worst U.S. foreign policy blunders in recent decades.⁷⁾ Leading international media outlets and many experts have likewise concluded that the Iran War ended as a strategic defeat for the United States. The following editorial from The New York Times captures this prevailing assessment:⁸⁾

The preliminary deal ending President Trump's four-month war with Iran is welcome but brings with it hard truths. Mr. Trump made a terrible mistake starting this war. He prosecuted it recklessly and in open defiance of the law. The United States is emerging weaker militarily, diplomatically and economically and will pay strategic costs for years to come.

| The U.S. Counter-Blockade: From a Masterstroke to the Winner's Curse

In reality, time was not on the United States' side during the Iran War. Washington believed that its counter-blockade would exert enough economic pressure to force Iran into submission. At the same time, however, it was facing growing domestic economic pressures ahead of the midterm elections. In the end, Iran's ability, forged through decades of sanctions, to withstand unprecedented economic pressure proved greater than America's ability to absorb the economic consequences at home and across the global economy.

Domestic political cohesion also favored Iran more than the United States. Washington and Israel launched the war with the objective of bringing about regime change in Tehran and repeatedly promoted reports of divisions within the Iranian leadership throughout the conflict. Yet Iran displayed remarkable unity under its new Supreme Leader, Mojtaba Khamenei, and the Islamic Revolutionary Guard Corps (IRGC). In contrast, public opinion in the United States opposed the war from the outset, with 49 percent against and 42 percent in favor. Since it was the least publicly supported war in recent U.S. history, domestic backing inevitably declined as the conflict dragged on.

From a military perspective, sustaining the war also became increasingly difficult for the United States. Critics argued that the excessive consumption of expensive weapons systems, including THAAD, Patriot air defense missiles, and Tomahawk cruise missiles, weakened America's ability both to continue supporting Ukraine and to defend its allies elsewhere. The fact that Gulf states directly affected by the conflict, including Saudi Arabia, Kuwait, Qatar, and Bahrain, no longer wanted the war to continue further added to Washington's difficulties. A representative example came on May 4, when Saudi Arabia and Qatar refused to allow the United States to use their military bases for the proposed "Freedom Project," an operation intended to establish an alternative shipping route through the Strait of Hormuz.

Had negotiations continued after the first high-level talks in Islamabad on April 12, with the United States using its counter-blockade to offset Iran's blockade strategy, Washington might have secured a far more favorable deal than the current MoU. As widely anticipated, Iran imposed a blockade of the Strait of Hormuz on March 2, only two days after the outbreak of the war. Secretary of State Marco Rubio described the closure as "the equivalent of an economic nuclear weapon,"⁹⁾ reflecting the enormous disruption it caused to the global economy. Explaining his decision to conclude the MoU during his press conference at the G7 Summit on June 17, President Trump acknowledged that he did not want to become another Herbert Hoover or trigger another Great Depression, effectively admitting that he fully appreciated the devastating economic consequences of the blockade.¹⁰⁾ Ironically, however, President Trump's sweeping tariff policy has itself frequently been compared to the Smoot-Hawley Tariff Act of 1930, enacted under President Hoover and widely regarded as one of history's most significant failures of protectionism.¹¹⁾

Immediately after the first Islamabad negotiations ended without agreement, President Trump ordered a counter-blockade at the entrance to the Strait of Hormuz from the Gulf of Oman and blocked Iranian commercial shipping. Once the strait, through which 90 percent of Iran's oil exports passed, was effectively closed, Iranian Foreign Minister Abbas Araghchi announced on April 17, four days before the second round of negotiations scheduled for April 21, that Iran would lift its blockade of the Strait of Hormuz. This demonstrated that the counter-blockade had become a masterstroke worthy of inclusion in negotiation textbooks. Had Washington reciprocated by lifting its own counter-blockade at that moment, thereby neutralizing Iran's blockade card and fostering mutual trust, the negotiations would almost certainly have proceeded in a much more constructive atmosphere and produced an agreement significantly more favorable to the United States than the current MoU.

By mid-April, the shock of the large-scale U.S. and Israeli airstrikes still dominated Iran, making it an ideal moment for Washington to seize the diplomatic initiative. Moreover, because neither belligerent trusted the other sufficiently to engage in serious negotiations, Iran's unilateral decision to lift its blockade represented an opportunity that should not have been overlooked. Although Iranian decision-making formally proceeds through consensus within the Supreme National Security Council before receiving the Supreme Leader's approval, internal divisions between hardliners and pragmatists remained significant. Accepting Foreign Minister Araghchi's initiative would therefore have strengthened the position of Iran's negotiating camp. Iranian officials reportedly expected that the United States would respond in kind by lifting its counter-blockade. Instead, President Trump, without giving sufficient weight to these strategic considerations, welcomed Iran's decision while simultaneously announcing that the U.S. counter-blockade would remain in place. On April 18, Iran's Supreme National Security Council Secretariat issued a statement condemning the United States and declaring that Iran's blockade of the Strait of Hormuz would continue unless Washington first lifted its counter-blockade. Araghchi was subsequently denounced so harshly that some Iranian soldiers reportedly called him a fool.¹²⁾

Thereafter, the United States continued what was effectively an "Operation Economic Fury"¹³⁾ until the MoU was signed, seeking to force Iran into submission through sustained economic pressure by maintaining the counter-blockade and intercepting Iranian tankers and commercial vessels. Although the counter-blockade initially proved to be an ingenious strategic instrument capable of compelling Iran to abandon what Secretary Rubio had called an "economic nuclear weapon," its effectiveness had clear limits. By overestimating its value and relying on it excessively, Washington gradually exhausted its political, military, diplomatic, economic, and psychological capacity to sustain the war over the following two months. The result was an MoU that drew widespread criticism both domestically and internationally. The episode illustrates how a masterstroke can ultimately turn into a winner's curse, reaffirming the enduring strategic lesson that overstretch is as dangerous as deficiency.

| Outlook for Future Negotiations

Under the terms of the MoU, the parties will spend the next 30 days negotiating and implementing detailed arrangements, including those governing navigation through the Strait of Hormuz. Iran's blockade and the U.S. counter-blockade are expected to be lifted, mines will be cleared, and normal commercial navigation through the strait will be restored. Following the formal signing, the two sides will have 60 days, until August 15, to negotiate such issues as the disposition of Iran's highly enriched uranium and the future of its uranium enrichment rights, the release of frozen assets and the lifting of various sanctions, assistance for Iran's postwar reconstruction, adoption of a U.N. Security Council resolution endorsing the final agreement, and the establishment of a monitoring mechanism to oversee implementation.

At the second high-level negotiations held on June 21, the two sides agreed on the following basic framework for future talks:¹⁴⁾

- To establish a negotiating structure consisting of a High Level Committee responsible for political oversight and mediation, Working Groups on the three substantive areas of the nuclear issue, sanctions, and monitoring and dispute resolution, and Chief Negotiators to lead the working groups and report to the High Level Committee.¹⁵⁾
- For the High Level Committee to develop a roadmap aimed at reaching a final agreement within 60 days.
- To establish a communication channel for implementing Article 5 of the MoU, including Iran's lifting of the Strait of Hormuz blockade and discussions concerning service charges.
- To create a management team to address the crisis in Lebanon.
- To continue technical-level discussions on the remaining issues.

Given the sharp differences between the U.S. and Iranian positions, as well as the intense domestic debates in both countries, many observers doubt that all outstanding issues can be resolved within the 60-day time frame. It is therefore likely that the negotiations will continue with mutually agreed extensions. Because the agenda is broad and disagreements remain substantial on many key issues, the talks are likely to alternate between periods of progress and stalemate. Moreover, growing criticism of the MoU raises the possibility that the United States could introduce new proposals that complicate the negotiations further. Chinese Foreign Minister Wang Yi made a similar assessment during a telephone conversation with Pakistan's foreign minister, stating that "the peace process has only just begun. The road ahead will be long and may even prove winding and difficult."¹⁶⁾ Meanwhile, as President Trump's attention gradually shifts elsewhere, sustaining the political momentum necessary for the follow-on negotiations is likely to become increasingly difficult.

| Implications for Upcoming U.S.-North Korea Dialogue

Immediately after announcing on June 13 that the United States and Iran would sign the MoU, President Trump posted on Truth Social a photograph of himself walking with Kim Jong Un during the June 2018 Singapore Summit. The post offers an important clue as to the direction of Trump's diplomacy later this year. According to reports, when President Trump met President Lee Jae Myung at the G7 Summit on June 16, he himself brought up the photograph on Truth Social and remarked that the time had come to turn attention once again to North Korea.¹⁷⁾ Having arrested Venezuelan President Nicolás Maduro and brought about regime change there, the United States has now intensified pressure on Cuba. Although Havana has made significant concessions, Washington continues to insist on replacing the current Cuban leadership, including the president. Unless the leadership steps down, the United States could even resort to limited military force to achieve regime change.

The ultimate destination of the Trump administration's series of foreign interventions during its second term appears to be North Korea. A successful breakthrough there would provide President Trump with the best opportunity to cement his legacy as both a peacemaker and a broker of international peace. The United States is therefore likely to pursue renewed dialogue with North Korea after the November 3 midterm elections, with the APEC Leaders' Meeting in Shenzhen on November 18-19 serving as a potential diplomatic milestone. Xi Jinping, who is scheduled to make a state visit to the United States in September, could play the role of intermediary. Kim Jong Un could travel either to Shenzhen or to Beijing around the time of the APEC summit. Although less likely, President Trump could also make a one-day visit to Pyongyang.

From the outset of his presidency, President Lee Jae Myung has publicly urged President Trump to serve as a peacemaker in achieving North Korea's denuclearization and lasting peace on the Korean Peninsula, while describing South Korea's own role as that of a pacemaker providing active support. At the G7 Summit in Évian on June 16, President Lee again asked President Trump to lead a peaceful resolution of the North Korean issue, just as he had done in ending the war in the Middle East.¹⁸⁾ From Kim Jong Un's perspective, there are reasons to question whether meeting a politically weakened President Trump after the Iran War would yield meaningful benefits. At the same time, however, unlike in 2018, Kim now believes he has completed North Korea's nuclear force while enjoying strong backing from both China and Russia. Encouraged by the Islamabad MoU, he may well conclude that he can obtain an outcome at least as favorable as Iran did.

Watching the negotiations that produced the Islamabad MoU inevitably raises concerns for South Koreans about the possible outcome of future U.S.-North Korea talks. The Trump administration demonstrated that it was prepared to fundamentally transform relations with Iran despite nearly five decades of hostility following the 1979 Islamic Revolution. Ending the adversarial relationship and lifting comprehensive sanctions signaled that Iran would be accepted as a normal member of the international community if it abandoned its nuclear ambitions. South Korea would naturally welcome such an outcome if North Korea likewise gave up its nuclear weapons and rejoined the international community as a normal state. The problem, however, is that there is little reason to believe North Korea is prepared to relinquish its nuclear arsenal.

Although South Korea continues to uphold the goal of complete denuclearization, much of the international community now regards that objective as unattainable, and approximately 90 percent of the South Korean public reportedly shares that assessment. President Trump's reported remark to President Lee at the June 16 G7 Summit that "something should have been done before North Korea realistically acquired nuclear weapons, but unfortunately it was not" amounts to an acknowledgment that complete denuclearization is no longer a realistic option.¹⁹⁾ If a summit is eventually held, the negotiations are therefore more likely to resemble arms control talks than denuclearization talks. Washington can be expected to prioritize eliminating direct threats to the U.S. homeland, as much as possible. Should U.S.-North Korea dialogue resume, therefore, South Korea may find itself confronting the harsh realities of the nuclear age in ways it has never experienced before.

The South Korean government should prepare a contingency strategy, a genuine "Plan B," for the possibility that the denuclearization it seeks may never materialize. Faced with the choice between the routine official references by U.S. officials to "denuclearization" and President Trump's occasional references to North Korea as a "nuclear state," which carries greater weight? Persisting in habitual assumptions about denuclearization while relying on President Trump's goodwill could prove to be an extraordinarily costly mistake. After all, it was the Trump administration that concluded an MoU which significantly compromised the national interests of Israel, one of America's closest allies that had fought alongside the United States in two wars since 2025. Responding to Israeli criticism of the MoU, Vice President Vance warned Israel not to challenge its only ally, the United States, but instead to recognize the strategic realities it faced.²⁰⁾ No one can confidently say that South Korea could never find itself in a similar position.

1. "READ: Full text of U.S.-Iran memorandum of understanding," AXIOS, Jun 17, 2026.
2. Ryan King, "Vance says US willing to 'fundamentally transform' Iran relationship ahead of peace deal negotiations in Switzerland," New York Post, June 21, 2026.
3. "Joint Statement by the Sultanate of Oman and the Islamic Republic of Iran," PR Newswire, June 23, 2026.
4. Patrick Wintour, "Secret correspondence claims suggest tensions at top of Iranian government," The Guardian, June 21, 2026.
5. Seong-Whun Cheon, "The Iran War as a Preventive War in Violation of International Norms," Sejong Focus, May 12, 2026.
6. Andrew England, "Iran to get access to $6bn of frozen funds to buy US goods," Financial Times, June 19, 2026.
7. Hwa-Seop Lim, "Reagan Must Be Turning in His Grave: Even Republicans Rattled by Trump's Iran Big Deal," Yonhap News Agency, June 18, 2026.
8. "President Trump Lost This War," New York Times, June 15, 2026.
9. Secretary of State Marco Rubio with Trey Yingst of Fox News Channel Interview, Thomas Jefferson Room, Washington, D.C., April 27, 2026.
10. Patrick Wintour, "Iran peace deal makes clear how far US has been forced to retreat since 2025," The Guardian, June 18, 2026.
11. Zachary Basu, "Trump is still haunted by Hoover's failures," AXIOS, June 22, 2026.
12. Seth J. Frantzman, "Iran split over Strait of Hormuz as IRGC challenges Foreign Minister Araghchi," The Jerusalem Post, April 18, 2026.
13. Brandi Vincent, "U.S. launches 'Operation Economic Fury' to obstruct Iran's revenue streams amid blockade," DefenseScoop, April 16, 2026.
14. Joint Statement by the State of Qatar and the Islamic Republic of Pakistan Regarding the Conclusion of Lake Lucerne Summit, Ministry of Foreign Affairs, Pakistan, June 22, 2026.
15. According to Iran's state-run IRNA, an additional Working Group on Reconstruction and Economic Development was established. The High Level Committee is to consist of the Speaker of the Iranian Parliament, the Iranian Foreign Minister, the U.S. Vice President, and the Prime Ministers of Pakistan and Qatar. Yong-Rae Kim, "Iran Announces Second Round of Talks with the U.S.; Four Working Groups to Be Established on Nuclear Issues, Reconstruction, and Other Matters," Yonhap News Agency, June 23, 2026.
16. Seong-Jo Chung, "China's Wang Yi: 'U.S.-Iran Negotiations Will Follow a Difficult Road; We Support the Process Without Interference'," Yonhap News Agency, June 25, 2026.
17. Hyeong-Seop Lim, "President Lee Says He Told Trump, 'The North Korean Nuclear Issue Cannot Be Approached Like That of Any Other Country'," Yonhap News Agency, June 19, 2026.
18. "Lee Urges Trump at G7 to Lead a Resolution of the North Korea Issue as He Did in the Middle East," Dong-A Ilbo, June 18, 2026.
19. Hyeong-Seop Lim, "President Lee Says He Told Trump, 'The North Korean Nuclear Issue Cannot Be Approached Like That of Any Other Country'," Yonhap News Agency, June 19, 2026.
20. David M. Halbfinger, "Israel, Stunned by Trump's Iran Deal, Sees It as a 'Catastrophic Capitulation'," New York Times, June 18, 2026; Barak Ravid, "Vance warns Israel: Don't fight "only ally" Trump on Iran deal," AXIOS, June 18, 2026.

※ The opinions expressed in 'Sejong Focus' are those of the author and do not represent the official views of Sejong Institute.