U.S.-Iran MOU and Negotiations: Expert Perspectives

The Global Economy Might Take Some Time to Recover

Rachel Ziemba, Senior Non-Resident Fellow with Gulf International Forum

The signing of the MOU has led to a short-term burst in additional fuel supplies exiting the Gulf from both Iranian and other producers as pent-up vessels escape the Strait. Envisioned plans to return to pre-war export and production levels look optimistic. It will take time to scale up production, reposition vessels and other policies. OFAC waivers have only just been introduced and are time-limited and Iran persists in claiming oversight over strait traffic even if it is waiving tolls. There is plenty of friction that can allow one of the signatories to say that the other is not complying sufficiently with the ceasefire to have a long-term deal.

For now, more vessels are likely to exit rather than enter the Strait and government-backed fleets and insurance are likely to dominate trade and try to derisk the trade. This will likely imply higher-than-average volumes compared to the war period, and some scope for producers to begin draining their storage and considering reversing shut-ins. Additional new supplies from Saudi Arabia and the UAE are likely to dominate in the near term, while Iraq, Kuwait and Qatar take longer to ramp back up. The latter will also look to risk-tolerant shippers to pick up their volumes.

Kuwait Is Relieved at the War’s End—but Fears Resumption

Dr. Courtney Freer, Senior Non-Resident Fellow with Gulf International Forum

Kuwait, with the memory of the Iraqi invasion and occupation from 1990 to 1991 and with recent attacks on civilian targets like Kuwait International Airport, is eager to end hostilities that started between the U.S.-Israel alliance and Iran at the end of February. For decades, Kuwait has crafted a foreign policy that has sustained both its independence and its security.

That said, the issue of the Strait of Hormuz remaining open without tariffs or conditions may constrain Kuwait’s ability to accept a deal in the long term. Kuwait is one of the most reliant among its neighbors on hydrocarbon revenues, with oil accounting for 88 percent of the Kuwaiti government’s budget, and oil revenues were forecasted to drop from $3.3 billion to $0.9 billion in March alone due to the Strait’s closure. 

Securing free passage of oil, particularly for Kuwait which lacks an alternative pipeline at present, is set to be an important issue for Kuwait and its neighbors who have also vocally opposed any potential Iranian-imposed tariffs. Notably, Kuwaiti Foreign Minister Shaykh Jarrah Jaber al-Ahmad al-Sabah received a phone call from his Iranian counterpart Abbas Arangchi three days ago – the first direct contact between the two since the start of the war—to discuss the MOU. In the conversation, the Kuwaiti Foreign Minister emphasized the need to adhere to “the principles of international law and the objectives enshrined in the United Nations Charter.” Kuwait is likely to continue to press these demands both with Iran and when American Secretary of State Marco Rubio visits Kuwait next week.

After the War, Iran’s Nuclear Ambitions Are Unlikely to Fade

Dr. Gawdat Bahgat, Senior Non-Resident Fellow with Gulf International Forum

After several weeks of intense fighting, the United States and Iran signed an agreement to manage their key differences, most notably Tehran’s nuclear program. For decades, both Republican and Democratic administrations have accused Iran of seeking to acquire nuclear weapons. Iranian leaders have categorically denied these accusations. 

Several conclusions can be drawn from both the war and the MOU. First, the joint U.S.-Israeli attacks in June last year, and again in February this year, might prompt Iran to cross the line and acquire the bomb. North Korea has not been attacked because it has the bomb, while Ukraine has been invaded because it gave up the nuclear arsenal it inherited from the former Soviet Union. But Iranian officials have consistently referred to the late Ayatollah Khamenei’s fatwa banning nuclear weapons.

Second, paragraph 8 of the MOU states that Washington and Tehran will address the nuclear program in negotiations following the agreement’s signing. The text does not specify commitment by either side.

Third, Iran has already paid a very high price for its nuclear program. Many nuclear scientists and political and military leaders died defending the nation’s “right” to develop its nuclear program, which became a key source of national pride. Thus, it is unlikely that Iran will agree to completely dismantle the program. 

Fourth, Tehran might agree to freeze enrichment for 15 or 20 years. But the know-how it has gained in the last few decades cannot be taken away. 

Finally, Gulf states are more concerned about Iran’s missile and drone capabilities than its nuclear program. These assets are not mentioned in the MOU; their absence is likely to be consequential.

The MOU Over Baghdad's Head

Dr. Muhanad Seloom, Senior Non-Resident Fellow with Gulf Internaional Forum

The most revealing thing about the Islamabad Memorandum, from Baghdad’s vantage, is what it does not say. The text names Lebanon explicitly, committing both sides to terminate operations there and guaranteeing its sovereignty. However, it does not name Iraq, the theater where American and Iranian power are most densely entangled. That silence is not a reprieve; it defers Iraq’s status to the 60-day negotiation, recasting Baghdad as an object of bargaining rather than an author of the settlement.

The load-bearing clause for Iraq is the second point, in which both sides agree to “refrain from interfering in each other’s internal affairs.” Nowhere is that pledge less credible than in Iraq, where both powers project influence through presence and proxy, and where a principals’ agreement does not obviously bind the agents operating in the gap. The “all fronts” language, having named Lebanon and skipped Iraq, leaves the status of Iran-aligned factions undefined, and Israel’s refusal to be bound even in Lebanon shows how little such wording constrains.

Two further provisions land on Iraq without addressing it: the withdrawal of U.S. forces “from the proximity” of Iran implicates the presence on Iraqi soil, while Iran’s immediate return to oil markets reshapes Iraqi revenue and the sanctions-conduit economy Baghdad has been caught in. Iraq’s task during the 60 days ahead is to convert exclusion into leverage, to ensure that troop disposition, the status of armed factions, and the oil shock are settled with Baghdad at the table, not over its head.

The Iran War Was a Blunder for Benjamin Netanyahu

Dr. Robert Geist Pinfold, Senior Non-Resident Fellow at Gulf International Forum

After the “Twelve Day War” of June 2025, Israeli Prime Minister Benjamin Netanyahu took a gamble: rather than start another round of conflict with Iran and have the US join in later, he would convince President Trump to join Tel Aviv’s campaign from the start. The putative logic is that this would serve as a force multiplier to degrade and destroy Iran’s military assets more quickly than in June 2025, whilst also insulating Israel from international criticism. 

This gamble has backfired. Iran’s regime not only survived, but is more confrontational than ever. Netanyahu, on the other hand, feels more constrained by US pressure to adhere to a ceasefire that is highly unpopular in Israel. The war has thus exacerbated domestic criticism of Netanyahu’s multi-front conflicts, a tentative suggestion that the era of Israel’s “October 7 Wars” may be ending. But Netanyahu has been critiqued less for waging war and more for doing so ineffectively. Many Israelis, including those in the anti-Netanyahu camp, still cling to the fantasy that if Israel strikes more frequently and more forcefully in Lebanon, Hezbollah will be defeated. Confronting Iran remains a consensus issue in Israel’s political mainstream. 

The same, albeit reversed, dynamic manifests in Iranian politics, too. This suggests that any US-Iran comprehensive agreement will not end the Israel-Iran war. Instead, both sides will return to shadow conflicts, using unwitting third parties—Iraq, Yemen and Lebanon—as battlegrounds for their regional powerplay. They will likely both profess support for any deal, whilst pushing it to its limits through confrontation in their proxy battlegrounds. The Israel-Iran rivalry will, then, remain a destabilizing feature of whatever regional order emerges from the ashes of the recent conflict.

Turkey Wants a Long-Term End to the War

Sinem Cengiz, Non-Resident Fellow with Gulf International Forum

As an immediate neighbor of Iran, Turkey’s primary objective has been to secure a ceasefire that could prevent the conflict from escalating across the wider region, while also ensuring that any potential regime change does not emerge as a result of Israeli or American intervention. At this stage, the memorandum of understanding (MOU) appears to align with Ankara’s expectations.

Consequently, Ankara has welcomed it, albeit with cautious optimism. That said, Turkey recognizes that this is a long-term process. The MOU is not an immediate solution to all concerns; rather, it represents the beginning of a process that must be managed carefully and responsibly.

Turkey also sees a role for itself in this process. According to Ankara, any comprehensive agreement should involve not only the states that have signed the MoU, but also take into account the interests of countries that have been significantly affected by the conflict given that Turkey is one of those countries whose economy and security was affected by this conflict.

So far, Turkey has managed to keep communication channels open with both Washington and Tehran. In particular, ahead of the NATO summit it will host in July—which U.S. President Donald Trump is expected to attend in person—Ankara would like to see tangible progress in implementing the MOU.

Turkish political elite have long believed that actions on the ground matter more than words on paper. Therefore, Ankara will judge the success of the MOU process not by declarations alone, but by concrete steps toward de-escalation, stability, and a sustainable political settlement.

To Preserve Peace, the GCC Must Defend Its Sovereignty

 Dr. Abdulla Banndar Al-Etaibi, Assistant Professor at Qatar University

The Gulf’s success has made it systemically important. But systemic importance also means systemic vulnerability. The more the Gulf became central to global flows, the more disruption of Gulf space became a powerful instrument of coercion. 

The war has challenged two assumptions of the Gulf model: the belief that external protection can shield the region from instability and the assumption that economic success can remain separate from hard security.

The first is the assumption that external protection is sufficient. Gulf states have deep partnerships with global powers, but the crisis has shown that external actors do not always define escalation in the same way Gulf societies do. For a great power like the United States, the consequences of a strike may be manageable; for the Gulf society where the strike takes place, it may be far less so. For an external actor, Gulf territory may be part of deterrence signaling. For the Gulf itself, it is home.

The second assumption is that prosperity can remain separate from hard security. The war has shown that economic infrastructure is now strategic infrastructure. Airports, ports, LNG facilities, financial districts, desalination plants, data centers, and shipping lanes are not only development assets. They are national security assets.

This is the real significance of the pan-GCC mood. Far more than a reaction to one war, it is a demand for a fundamentally different regional order. Gulf societies are beginning to reject the idea that their region should function as a shock absorber for everyone else’s conflicts. They are no longer satisfied with being praised as mediators after escalation, compensated as markets after disruption, or consulted as partners after decisions have already been made. They want prevention, respect, and agency of their own.

The MOU Is a Win for Qatari Diplomacy

Dr. Ali Bakir, Senior Non-Resident Fellow at the Middle East Council on Global Affair

The MOU advances one of Qatar’s core strategic objectives of preserving stability in the Gulf, reopening and securing the Strait of Hormuz, and creating the necessary conditions and environment that could help end the conflict.

The country’s heavy dependence on the uninterrupted flow of liquefied natural gas through the Strait of Hormuz, with no comparable alternative route currently available, means that Doha has few choices. Any prolonged disruption would carry existential threats to the country’s security and economic well-being.

The agreement also represents a diplomatic achievement for Doha. Qatar’s support for Pakistani mediation at a critical moment helped create momentum toward the MOU, demonstrating once again its ability to facilitate dialogue during periods of heightened tension.

From a broader perspective, the MOU strengthens Qatar’s argument that diplomacy, mediation, and crisis management remain valuable sources of influence. It also highlights Doha’s continued relevance in both regional and international affairs, particularly at times when conventional diplomatic channels are under strain.

The more important question, however, concerns the extent to which Qatar can translate such diplomatic successes into greater security. The Iran war has challenged longstanding assumptions that neutrality, balanced relations, and mediation alone can shield states from the consequences of regional conflict.

While the MOU underscores Qatar’s diplomatic utility, two key features must be noted. First, it is not certain the MOU will hold for 60 days, given that elements in the United States, Israel, and the Iranian regime have no interest in upholding it or reaching a comprehensive agreement. Second, it remains uncertain whether Doha’s achievements can be converted into meaningful deterrence or enhanced protection against future crises. This means that at the current moment, Doha has to prepare only for the worse until a comprehensive agreement between Iran and the US becomes a reality.

Bahrain Wants More than a Ceasefire

 Mahdi Ghuloom, Fellow for Geopolitics at ORF Middle East

The signing of the US-Iran MOU halts a dangerous spiral that had directly threatened Bahraini territory. The lowest available estimate compiled by the author from Bahrain Defence Force disclosures suggests Iran launched 559 drones and 200 missiles at Bahrain since February 28—including at least 36 drones in the week before the signing of the MOU, an enormous number considering the country’s limited size and population. Paired with the immediate reopening of the Strait of Hormuz, it delivers tangible, albeit precarious, relief. Nestled as it is in the Gulf, Bahrain is almost wholly dependent on the Strait for imports, including gas, food, and other essential commodities. 

Still, Bahrain seeks verifiable outcomes, not another tactical pause. For Manama, any meaningful de-escalation must address the wider regional security environment. This helps explain Bahrain’s emphasis on “non-interference” in internal affairs. Since the conflict began, it has faced sustained Iran-linked efforts to inflame sectarian tensions while continuing to uncover proxy networks allegedly backed by Tehran. Bahrain has also underscored the importance of respect for regional sovereignty. This is particularly significant given Iran’s repeated justification of attacks on Bahrain and other Gulf states on the basis of their hosting of US military assets: an argument that directly challenges the sovereign right to determine security arrangements—let alone the lack of proof such assets were used to attack Iran.

Against this backdrop, Bahrain appears prepared to play a measured but principled role in supporting constructive outcomes, which translates into exercising its role in multilateral institutions, especially as a non-permanent member of the UN Security Council and the rotating President of the GCC bloc.