Senior U.S. officials dictate memorandum with Iran to journalists

Dan McTeague of Canadians for Affordable Energy on the outlook of gas prices after the U.S. and Iran reach a tentative deal to reopen the Strait of Hormuz.

DUBAI, United Arab Emirates — Senior U.S. officials dictated the memorandum of understanding with Iran to journalists Wednesday after days of secrecy, and Iran suggested that its deal with the United States could be signed by Presidents Donald Trump and Masoud Pezeshkian.

Such an signing ceremony would represent a major step for the two countries, which saw diplomatic relations break off in 1980 over the U.S. Embassy hostage crisis in Tehran.

The U.S. officials spoke on condition of anonymity to read the the draft, which Iran has not released, ahead of formal signing ceremony set for Friday.

According to the officials, the draft agreement includes a new “minimum” standard for downblending of highly enriched Iranian uranium and has provisions to ensure the “territorial integrity” of Lebanon after Israel’s latest attacks against Hezbollah in Lebanese territory.

In return, the U.S. will move to waive, but not eliminate, some wide-ranging sanctions against Iran once the deal is signed.

The U.S. draft of the agreement also secures toll-free passage of the Strait of Hormuz for only 60 days, and it does not preclude fees in future, the officials said.

Meanwhile in Iran, Foreign Ministry spokesperson Esmail Baghaei was quoted by Iranian state television talking about the potential for the two presidents to sign the pact.

Pezeshkian became president on a promise of seeking better relations with the West. However, he’s been sidelined for months after Iran’s mass killing of protesters in January and in the war as hard-liners have taken over the levers of the country’s theocracy.

Trump casts uncertainty on signing plans

U.S. President Donald Trump cast some uncertainty on whether the signing would happen as planned. Asked how confident he was that the ceremony would take place, Trump remarked on the unpredictability of deals.

“You never know with deals, do you? But you’re going to find out pretty soon,” he said.

The U.S. and Israel went to war on Feb. 28 in part to prevent Iran from ever getting a nuclear weapon, although Trump’s goals in the conflict have repeatedly shifted. The interim deal stops the war before that aim is secured. Instead, it opens a two-month period for nuclear negotiations and appears to offer Iran several benefits up front while extracting little in return.

The U.S. agreement to immediately allow Iran to sell its oil freely and the offer to eventually lift all sanctions, for instance, represent major concessions that go beyond the terms of Iran’s 2015 nuclear deal with world powers. Trump withdrew America from that pact in his first term, declaring it the “worst deal ever.”

The accord likely will draw intense opposition in Washington, and it appears to be a major setback for Israeli Prime Minister Benjamin Netanyahu, who has come under criticism at home from the media, his opponents and even some allies as details emerge.

The deal will stop the fighting and start more negotiations

Much of the agreement would restore the status quo before the war, including ending hostilities, restarting negotiations between the U.S. and Iran over Tehran’s nuclear program, and reopening the strait, which is a crucial passage for the world’s oil and natural gas and whose closure created a historic energy crisis.

The deal includes an end to the fighting in Lebanon between Israel and the Iranian-backed militia Hezbollah. That is one of the most delicate parts of the agreement because Israel has maintained it will continue to defend itself and to occupy vast swaths of Lebanon. Iran has said Israel must withdraw under the deal, although the leaked versions make no mention of withdrawal.

The White House and other American officials have not published the terms and did not immediately respond to questions.

Trump has cited various goals for the war, including at times vowing it would end Iran’s nuclear and missile programs and its support for Hezbollah and other proxy groups in the region. He also suggested it could lead to toppling the Iranian government.

The interim deal falls short of all of these goals, but Trump hailed it Wednesday.

“Nobody knows what it is but it’s very strong,” Trump said in France, where he is attending a Group of Seven summit.

But he also opened the door to abandoning it: “It’s a memorandum of understanding and if I don’t like it, we’ll go back to shooting at them, dropping bombs.”

Major concessions have been offered to Iran

Some concessions to Iran — including the full lifting of sanctions and the release of frozen assets — would happen gradually and be linked to progress in the nuclear talks, according to officials from Pakistan, a key mediator. They outlined some of the deal’s major points on condition of anonymity because of the sensitivity of the issue.

But in the meantime, the U.S. will issue waivers to sanctions that allow Iran to sell oil freely.

The Islamic Republic’s oil export revenues in 2024 were more than US$46 billion. Its main buyer of oil, China, is believed to have bought at below-market prices because of its willingness to ignore the sanctions.

Granting oil waivers at the start of the 60-day talks strips the U.S. of a major point of leverage. Only at the conclusion of the overall deal in 2015 were sanctions on Iran’s oil lifted.

The interim deal also opens the door to ending all sanctions Iran faces from the U.S. and at the U.N. -- including those over Tehran’s weapons programs and human rights abuses -- though it says the schedule for that will be worked out later. Still, that far surpasses the 2015 deal, which only lifted some sanctions in exchange for Iran drastically reducing its enrichment and stockpile of uranium.

The accord would also provide Iran with at least US$300 billion to rebuild after an intense U.S. and Israeli bombing campaign -- an extraordinary figure and another major benefit for Iran. The money also appears dependent on the progress of further negotiations.

U.S. Vice President JD Vance has said Gulf Arab nations would invest that amount. But Gulf countries would likely be reluctant to help Iran after Iranian attacks in the war destroyed oil facilities and other sites in their territory.

Trump reiterated Wednesday that the U.S. would not contribute and said it was up to other countries if they wanted to invest.

The pact would provide relief to the global economy

The deal provides a major win for the global economy -- the reopening of the Strait of Hormuz, the narrow mouth of the Persian Gulf through which a fifth of all oil and natural gas traded once passed before the war began. Since then, Iranian attacks on shipping and the threat to vessels effectively shut the strait.

The strait’s closure drove up energy prices around the world and made many basics, including food, more expensive. Iran let out some vessels that paid tolls, something never done before in the strait, which has long has been considered an international waterway. The U.S. later provided military support to get other tankers out, but traffic was nowhere near levels before the war.

The deal also says the U.S. will lift a blockade imposed on Iranian ports and that the strait will return to its prewar traffic levels in 30 days, while acknowledging Iranian mines may need to be destroyed.

Many issues would have to be resolved in future talks

The interim deal sets a 60-day window, which can be extended, to negotiate over limiting Iran’s nuclear program, which has been discussed at multiple rounds of talks during Trump’s second administration without success. The U.S. promises not to make threats of military action under the current deal after two rounds of talks were interrupted by attacks.

Iran maintains its nuclear program is peaceful, though it has enough highly enriched uranium to build multiple atomic bombs, should it choose to do so, according to the International Atomic Energy Agency.

In the interim deal, Iran reiterates that it will never build a nuclear weapon -- a promise it also made in the 2015 nuclear accord.

Michelle L. Price, Matthew Lee, Jon Gambrell, Zeke Miller And Samy Magdy, The Associated Press

Miller and Price reported from Washington, and Magdy from Cairo. Associated Press writers Aamer Madhani in Evian-les-Bains, France, Darlene Superville in Geneva and Munir Ahmed in Islamabad contributed to this story.