Agencies | Washington/ Tehran:
The clock is running out on the fragile US-Iran framework. The 60-day window created by the June 17 memorandum of understanding (MoU) expires on August 17, but instead of paving the way for a lasting peace, the deadline has exposed just how deeply the agreement has unravelled. Washington and Tehran are trading increasingly sharp warnings, negotiations have virtually stalled, and the Strait of Hormuz has emerged as the most dangerous flashpoint in the confrontation.
The immediate question is no longer simply whether the agreement will be extended. It is whether the United States and Iran can find a new diplomatic formula—or whether the collapse of the existing framework will push the two sides back towards confrontation.
The MoU was signed on June 17 by US President Donald Trump and Iranian President Masoud Pezeshkian after months of conflict. It was intended to provide a framework for ending hostilities, with both sides committing to the “immediate and permanent termination of military operations” and agreeing to work towards a broader settlement within 60 days.
But the agreement contained far more than a promise to stop fighting.
Washington was expected to lift its naval blockade within 30 days, ease sanctions, provide waivers for Iranian oil exports and allow Tehran access to frozen funds. The framework also envisaged a reconstruction and development package worth at least $300 billion for Iran.
Iran, meanwhile, was expected to clear mines in the Strait of Hormuz and permit commercial shipping through the strategic waterway for 60 days. Tehran also reaffirmed that it would not pursue nuclear weapons and agreed to negotiate the difficult issue of uranium enrichment.
The problem was that the two sides quickly developed sharply different interpretations of what they had agreed to do.
Washington accused Tehran of failing to reopen Hormuz, while Iran accused the United States of failing to lift its blockade and honour commitments on sanctions and frozen assets.
By July 7, Trump declared the agreement “over”. Iran subsequently accused Washington of violating the understanding and said it had suspended its own commitments.
In effect, therefore, Monday’s deadline is less the collapse of a functioning peace agreement than the formal expiry of a framework that had already largely stopped working.
At the centre of the crisis is the Strait of Hormuz.
The narrow waterway is one of the world’s most important energy corridors, carrying roughly one-fifth of global oil and LNG supplies before the war.
Iran insists that the strait remains under its control. Iranian Deputy Foreign Minister Kazem Gharibabadi said it would be “opened and closed only under Iran’s command”.
Washington’s position could hardly be more different.
Trump has repeatedly claimed that the United States has “total control” of Hormuz. On Friday, he escalated his rhetoric further, saying that after defeating Iran he would “pretty soon” declare the Strait of Hormuz a US territory.
The comments have transformed what was already a military and diplomatic dispute into a confrontation over who controls one of the world’s most strategically important waterways.
The consequences are already being felt.
Commercial traffic through Hormuz has fallen dramatically. According to the figures cited in the source material, only five commodity vessels crossed the strait on Saturday, while none were recorded on Sunday, compared with 31 vessels during the previous weekend.
The UAE has also accused Iran of attacking three vessels operated by Abu Dhabi National Oil Company, although Tehran has not accepted the allegations.
Any prolonged disruption could have consequences far beyond the Gulf, particularly for global oil prices, shipping costs and inflation.
Trump’s recent statements suggest that Washington is preparing for the possibility that the confrontation will continue beyond August 17.
On August 3, he described negotiations as Iran’s “last chance” and warned Tehran of severe consequences if it failed to reach an agreement. He also said the US blockade would remain until there was a deal or what he called “Total Surrender”.
Days later, Trump began preparing the American public for the economic costs of the confrontation.
At an event in New York on August 14, he argued that Americans might have to pay more for gasoline as the United States sought to prevent Iran from acquiring nuclear weapons. He again raised the possibility of declaring Hormuz US territory.
The message from Washington is increasingly clear: the expiration of the MoU will not necessarily mean an easing of pressure.
US Treasury Secretary Scott Bessent has also indicated that Washington could combine greater economic pressure with the continuing blockade of Iranian ports.
Iran, meanwhile, appears unwilling to return to the negotiating table merely to revive the June framework.
Foreign Minister Abbas Araghchi has argued that there was no temporary ceasefire to extend because the agreement was intended to end the war altogether.
“We did not have a ceasefire in the first place that we would now want to extend,” he said. “We had ‘the end of the war,’ and now there is a new situation.”
On Saturday, Araghchi said Tehran had not yet decided whether to restart negotiations with Washington.
Qatar and Pakistan have been communicating with Tehran, he said, but those contacts do not amount to formal negotiations.
Iran is also working with Oman on possible alternative arrangements for commercial shipping through Hormuz. Araghchi said the previous routes were no longer functioning and that a temporary system was being considered.
But Tehran has made clear that a return to normal shipping depends on Washington meeting Iranian conditions.
The end of the 60-day framework does not necessarily mean the end of diplomacy.
Qatar, Pakistan and Oman have all played roles in communicating with the two sides. Iran has acknowledged that messages are still being exchanged, even while insisting that formal negotiations have not resumed.
That leaves open the possibility of a new agreement outside the original framework.
Such an arrangement could begin with practical issues—commercial shipping, humanitarian access and energy flows—before moving towards the much harder questions of sanctions, frozen Iranian assets and the nuclear programme.
The clearest early indication of whether tensions are easing will be the movement of commercial vessels.
If Washington and Tehran can establish a mechanism allowing ships to pass safely through Hormuz, it could create breathing space for broader diplomacy.
But if attacks, interceptions and competing blockades continue, the crisis could become much harder to contain.
Before the war, Hormuz carried around one-fifth of global oil and LNG flows. Brent crude was around $88.72 a barrel early Monday after gaining more than five per cent the previous week, according to the source material.
That makes Hormuz not just a regional security issue, but a global economic pressure point.
Washington has already indicated that additional economic measures against Tehran are possible.
Future sanctions could target Iranian financial networks, oil exports and organisations accused of helping Iran bypass existing restrictions.
The objective would be to increase the economic cost of maintaining the confrontation and force Tehran towards negotiations.
But Iran faces its own dilemma. Accepting an agreement under intense American economic and military pressure could be politically difficult for the Iranian leadership.
The expiry of the MoU does not automatically mean another military operation will begin.
Yet the ingredients for escalation are unmistakably present.
The United States maintains its naval presence and blockade, while Iran continues to restrict shipping through Hormuz. Both sides are warning each other against testing their resolve.
Iranian Army chief Major General Amir Hatami has also responded sharply to Trump’s comments about Hormuz, warning against treating the issue lightly and asserting that Iran has forces capable of resisting any attempt to restore the previous US position in the Gulf.
The greatest danger may therefore be miscalculation.
A single attack on a commercial vessel, an interception involving US or Iranian forces, or an incident involving naval assets could rapidly turn the current standoff into a wider military confrontation.
Behind the immediate dispute over Hormuz lies the bigger unresolved issue: Iran’s nuclear programme.
The June framework was supposed to push that question into negotiations for a final agreement. Iran reaffirmed that it would not pursue nuclear weapons, while Washington sought restrictions on uranium enrichment and stronger guarantees.
With the wider agreement now effectively broken down, however, the nuclear issue has become even more difficult.
Any future settlement would have to address sanctions, Iranian oil exports, frozen assets, the US military presence in the region, uranium enrichment, nuclear safeguards, shipping through Hormuz and guarantees that neither side would abandon the agreement.
That is a far more complicated agenda than the original 60-day framework ever contemplated.
The most likely immediate outcome may be neither peace nor full-scale war.
Instead, Washington and Tehran could enter a prolonged period of pressure, brinkmanship and indirect diplomacy.
The United States is likely to rely on sanctions and military pressure to force concessions. Iran, meanwhile, has Hormuz and its influence over regional shipping as powerful leverage.
Both sides have reasons to keep talking.
Washington wants an end to the conflict without appearing to concede to Tehran. Iran needs economic relief but has shown little willingness to accept an arrangement that compromises its position on Hormuz or leaves the US blockade intact.
The expiry of the June MoU, therefore, should not be viewed as the end of the story.
It is the beginning of a potentially more dangerous chapter.
Can Washington and Tehran build a new diplomatic bridge before the disputes over Hormuz, sanctions and Iran’s nuclear programme ignite another round of direct confrontation?
For now, neither side appears ready to blink.
And as the clock runs out on the 60-day agreement, the Strait of Hormuz is emerging as the place where the next chapter of the US-Iran crisis could be decided.
