TEHRAN – The sentence that matters most in the Iran-US draft memorandum of understanding is not the one about Hormuz, and it is not the one about nuclear weapons. It is the one about oil. According to Iran’s semi-official Mehr News Agency, which published details of the draft text on Sunday, the document commits the United States to suspending sanctions on the sale of Iranian crude, petrochemical products, and petrochemical derivatives – not after a final deal is struck, but immediately upon signing. Treasury Department waivers, the text states, would take effect the moment ink goes on the page.
That commitment, if honored, would mark the largest single act of US sanctions relief toward Iran in decades. The question now is whether it will survive contact with Washington’s Iran hawks, multiple competing versions of the same document, and Tehran’s own unresolved internal review of the agreement’s terms.
President Donald Trump announced Sunday that a deal with the Islamic Republic of Iran was complete, posting on Truth Social that he was authorizing the toll-free opening of the Strait of Hormuz and the immediate removal of the US naval blockade. Pakistani Prime Minister Shehbaz Sharif, one of the primary mediators alongside Qatar, confirmed that an agreement had been reached and said a formal document signing was expected Friday, with pre-implementation discussions in the interim. Iran’s Fars News Agency, however, citing an informed source, said Tehran was still conducting reviews of the political, legal, and technical aspects of the agreement – and that expert-level discussions were ongoing.
The gap between Trump’s announcement and Tehran’s hedging is itself a window into the oil clause’s fragility. Bloomberg reported Saturday that at least three competing versions of the MOU were in circulation, all built around the same core architecture – Hormuz reopening, sanctions relief, a 60-day window for nuclear negotiations – but diverging on the specifics of how much financial relief Iran would receive upfront and how quickly the waivers would kick in. The version Iran circulated through Mehr News Agency is the most expansive: it calls for Treasury waivers on crude oil, petrochemicals, and all related services including banking, insurance, and transportation, all effective immediately. The version seen by Bloomberg contained no such stipulation on timing.
The difference is not semantic. Iran’s oil sector is structurally dependent on the speed of sanctions relief. Since March 2026, when the US naval blockade began disrupting tanker traffic through the Strait of Hormuz, Iranian crude exports have been effectively frozen at a moment when prices were already being distorted by the Hormuz premium. Treasury Secretary Scott Bessent offered a preview of what partial relief can do: in a narrowly tailored authorization issued Friday, his department briefly unsanctioned Iranian oil already stranded at sea – roughly 140 million barrels largely being held by Chinese buyers – to relieve short-term supply pressure. Brent crude had risen above $103 a barrel that week. The authorization was strictly limited to oil already in transit and explicitly did not authorize new purchases. Markets responded immediately: by Saturday, Brent had slipped below $90 as the prospect of a fuller deal began pricing into energy contracts.
A senior Iranian official told Reuters the final draft memorandum covered the full range of outstanding issues between the two countries: Iran’s nuclear work, the Hormuz waterway, US waivers on oil sanctions, the release of frozen assets, and reconstruction planning. Under the terms described by that official, Iran would immediately reopen the Strait to all commercial vessels while the US lifted its naval blockade – the lifting to begin upon signing and be completed within 30 days. Washington would release $25 billion of Iran’s frozen assets, approximately half before final negotiations began and the remainder tied to progress toward a comprehensive agreement. And crucially: the US would commit to issuing no new sanctions against Iran until a final deal was reached.
The military posture clause is the least discussed but among the most significant. The draft text, as reported by Mehr, includes an explicit US commitment not to reinforce its forces in the Middle East during the 60-day negotiation window. It is a direct constraint on CENTCOM’s operational latitude – and one that US hawks on Capitol Hill and in conservative media have already begun to challenge on the grounds that it limits American freedom of action in a region where the US Navy is currently at peak deployment.
The nuclear dimension, meanwhile, is deliberately deferred. Iran would reaffirm its commitment under the Nuclear Non-Proliferation Treaty to abstain from producing or acquiring nuclear weapons – a pledge Tehran has maintained publicly throughout the conflict. The harder questions: the fate of Iran’s enriched uranium stockpile, its centrifuge infrastructure at Fordow and Natanz, and the status of its civilian enrichment program, would all be left for a separate agreement to be negotiated during the 60-day window. The framework for that second deal, the MOU states, will be based on the outcome of those discussions. What it will not contain, in any version reviewed by reporters, is a pre-committed Iranian commitment to halt enrichment as a precondition for sanctions relief.
That gap has alarmed Israel. Prime Minister Benjamin Netanyahu, who was excluded from the negotiations – with the US working through Pakistani and Qatari mediators, not through any Israeli channel – convened his security cabinet Sunday evening to review the agreement. Israeli officials told domestic media the terms of the MOU endanger Israeli security interests and fail to address the core question of Iran’s nuclear capabilities. Netanyahu has long argued that any deal that does not include the dismantlement of Iran’s enrichment infrastructure amounts to a capitulation; the text circulating through Sunday does not come close to that standard.
Steve Witkoff, who led the American negotiating team alongside Jared Kushner, is expected to be present at the formal signing. Vice President JD Vance is also traveling to Geneva for the ceremony, lending the signing a degree of political weight the White House has been at pains to project. What remains publicly unresolved is whether the version of the oil sanctions clause that Witkoff agreed to in Islamabad matches the version that Mehr published in Tehran. The divergence in text has not been publicly reconciled.
Fourteen points. One of them is about oil. That point is doing most of the economic work in the agreement – and carrying most of the political risk. Iran has already signaled it expects service fees on Hormuz transit regardless of what any signed MOU says about toll-free passage – which suggests that Tehran’s interpretation of what it has agreed to may not align with Washington’s on multiple fronts, not just oil. What happens when those interpretations collide, in the 60-day window or at the signing table on Friday, is the question no version of the draft memorandum answers.
