The Art of the Capitulation
That's what the Trump, author of The Art of the Deal, has demonstrated in his emerging Memorandum of Understanding with Iran
[1,745 words: a 9-minute read.]
I’ll cover two aspects of the ongoing negotiations between the US and Iran in this post: First, some of President Trump’s recent strange statements and moves. Second, the details—as best as can be pieced together—of the Memorandum of Understanding (MOU) that the US and Iran have been negotiating, via the intermediaries: Pakistan and Qatar.
Trump said recently that he had ordered the US military to carry out a “secret” operation that succeeded in moving 100 million barrels of oil through the Strait of Hormuz, despite Iran’s closure of the waterway since the US and Israel attacked Iran on February 28—the second time in less than a year. Trump’s claim is odd: If indeed the operation was “secret,” why announce it in public and give Iran time to take countermeasures? Moreover, while 100 million barrels of oil may sound like a lot, it amounts to slightly less than one day’s worth of global consumption—not nearly enough to have any positive effect on prices.
Trump also told reporters on Thursday that the Strait of Hormuz has been open “for a number of months”—and that they just hadn’t known about it. But anyone who has been following the news even occasionally knows that this claim is not accurate. Some 138 ships on average transited the Strait each day before the war began on February 28. Since then, while some have managed to sneak through, under cover of darkness and with their transponders turned off, or with Iranian permission, the volume of traffic is not even remotely close to what it was before the war, and about 20-25% of the global trade in oil and LNG remain trapped inside the Persian Gulf.
What was even more perplexing about Trump’s statement was that, in touting the MOU as a great achievement, he said that the Straits would be open in a few days—odd given his claims moments earlier that the waterway had been open for months. If the Strait has been open for months, why say that it would open in a few days?
Trump continues to claim that Iran’s armed forces, including radars, have been obliterated. Yet during the periodic skirmishes between US and Iranian forces, the Trump administration has said that US forces acted in self-defense—a strange assertion about a country whose military has supposedly been demolished.
If further proof were needed that Iran retains its drone and missile forces, when Trump has tried to coerce Iran into making additional concessions, it has struck US military assets in the Persian Gulf countries and in Jordan. Tehran has also shown a willingness to extend the war into Israel, which it did when Israeli forces struck Beirut, a move Iran deemed a violation of the ceasefire Trump had arranged between Israel and Lebanon.
Trump claimed recently that he would hit Iran “very hard” if they dragged out the negotiations, adding that they wouldn’t because they were “begging” for a deal, which they need more than the US does. But when Trump added amendments to the draft MOU, to which the mediators had obtained agreement from American and Iranian negotiators, Iran flatly rejected the additional terms inserted by Trump, and when he launched strikes on Iran, Tehran fired back, showing that it is prepared to fight rather than accept a deal that doesn’t contain terms that it has long insisted on, particularly a full ceasefire that includes Lebanon, the unfreezing, up-front, of part ($12 billion) of frozen Iranian assets, the phased lifting of sanctions, and the end to the US naval blockade. This is not the behavior of a country that has no military power left and is pleading for a deal. In fact, in a bid to steady oil markets, it’s the administration that has been saying that an agreement is imminent—a claim Trump himself has made on 39 occasions.
Now to the details of the MOU:
Iranian media, and more importantly, Iran’s foreign minister, Abbas Araghchi, have been revealing the outlines of the Memorandum of Understanding that the US and Iran appear to have hammered out and that awaits signature.
Here’s a synopsis:
—Phase 1, to begin after a 60—day ceasefire on all fronts, including Lebanon, is in place. The following points will presumably be agreed upon, in principle, in advance of that 60—day period:
—An end to the US naval blockade on Iran.
—The unfreezing and transfer to Iran of part of its assets, likely $12 bn. [The rest will be transferred once there is a final deal based on the MOU]
—An end to all restrictions on Iran’s energy exports.
—The opening of the Strait of Hormuz, but with Iran retaining (unspecified) authority, over it, along with Oman, which is located on the opposite shore of the Strait. [Iran’s foreign minister has stated that this will include the right to levy some sort of fee for ships transiting the Gulf to cover the costs of services that are provided to them.]
—The lifting of all sanctions on Iran. [The timeline and pace at which this will be implemented remain unclear and will be worked out during the 60—day negotiations.]
—The negotiation of a plan for the reconstruction of Iran in light of the damage it has sustained as a result of US and Israeli strikes. [The details and dollar amount are unclear, but Iran is not calling this war reparations, which would be an outright humiliation for Trump.]
—Phase 2, to be negotiated during the 60 day period.
— The details of sanctions relief, the unfreezing of the remainder of Iranian assets, and the modalities of Iran’s authority over the Strait will be finalized during this period. But the focus will be on the future of Iran’s nuclear program.
Some observations:
1) Assuming the American side confirms these details on the MOU, it’s hard to see how Trump can spin this framework agreement as a win, given that Iran’s assets will be unfrozen, the blockade will be lifted, and Iran will have a degree of authority over the Strait that it has never had—and probably never imagined it would. And all of this with no up-front commitments regarding its nuclear program.
And the decision of the UAE, the Gulf state that’s most hostile to Iran, to hand over $10 billion (and according to some reports as much as $20 billion) of Iran’s frozen assets—and has already delivered $3 billion— so as to stay out of harm's way shows that Iran’s position in the Persian Gulf region has become stronger as a result of Trump’s war.
2) Contrary to what Trump and Netanyahu have implied, Iran has in fact made no up-front commitment that the final deal will include the removal of Iran’s enriched uranium out of the country or the dismantling of its nuclear infrastructure. Recall, that these were key objectives of Trump and Netanyahu.
Trump keeps insisting that the final deal will be a major achievement because Iran will never have nuclear weapons. Iran has long publicly renounced nuclear weapons—not only in line with a religious ruling by the late Ayatollah Ali Khamenei, but, in writing, in the preamble of the 2015 JCPOA, which Trump withdrew the US from in 2018.
4) Neither has Iran agreed to limit the number, range, and production volume of ballistic missiles. Recall that this has been one of Netanyahu’s principal objectives.
5) Nor has Iran made any apparent commitment to end its support for regional partners such as Hezbollah in Lebanon and Ansar Allah in Yemen. This, too, was an important goal for Netanyahu.
6) I remain skeptical that the technical details related to uranium enrichment issue other aspects of Iran’s nuclear program can be worked out in 60 days, given that it took years to finalize the JCPOA.
7) Trump will claim that the opening of the Strait and Iran’s commitment not to develop a nuclear weapon are major victories. But, again, both of these conditions existed before the war began.
8) An unknown, given that the cease-fire encompasses Lebanon, is whether Netanyahu now in effect has veto power over the durability of a final agreement because he could resume the war in Lebanon. This is important: Israel has no reason whatsoever to like this Memorandum of Understanding. If Netanyahu attempts to derail a final deal, there are two possibilities, assuming Iran follows through on its pledge to retaliate if Israel attacks Beirut—which it may do if Israel breaks the ceasefire: the US gets drawn into the war, or Israel is left to fight alone. The former outcome could lead to a return to a full-scale war and once again push up the price of oil and other essential commodities. The latter outcome would create a crisis in US-Israeli relations, and Trump’s abandonment of Israel will denounced by individuals and groups in the US that insist on near-unconditional American support for that country and have also been prominent backers of Trump.
9) Assuming that the White House confirms the Iranian statements on the MOU, it’s clear that this war has achieved nothing that Trump can brag about. What remains to be seen is whether his MAGA acolytes believes his spin—as always—and whether he gets some credit for easing the economic hardships produced by his needless, ruinous war.
10) As he has already done once, Trump could try to insert new provisions into this framework agreement. But as in the past, Iran will reject it, leaving Trump with the option of restarting the war to pressure Tehran. The problem with that option is that Iran has shown that it will fight back and extend the war to the rest of the Persian Gulf, which will prolong the closure of the Strait and increase the steep toll that the closure has already taken on the global economy, and even create a recession. Trump can say, as he has, that he doesn’t care about this, but with the midterm elections approaching and his poll numbers sinking, it’s safe to assume that he very much does care. It’s also safe to assume that Iran knows that he’s under pressure. The war has doubtless created economic hardship in Iran as well—by increasing inflation, forcing business closures, and accelerating the decline in the value of its currency, the rial. What is less clear—considering that gaining relief from sanctions and restrictions on oil exports are arguably Iran’s most important goals in the negotiations—is the extent to which this economic hardship is putting pressure on Iran to conclude a deal without dragging out negotiations. So far, if it’s indeed facing pressure, it has been effective in disguising that fact.
11) If a Memorandum of Understanding is indeed signed based on these points, it’s clear that Trump’s war was unnecessary, achieved no positive results, and that the Iranians have prevailed.