Iran War: Iran Disses Witkoff and Kushner in Doha but Does Not Get $6 Billion in Frozen Assets; Strait of Hormuz Traffic Sub-Par but Continues on Oman Side as Talks Over Future Management Continue

[Today’s Iran war update yet again launched before complete. Please return at 8:00 AM EDT for a final version]

We’ll soon discuss the fact that the Memorandum of Understanding is clearly never going to get done and consider what might come when it officially breaks down.

Janta Ka makes his lead item the fact that Trump set up Witkoff and Kushner for humiliation by trying to bounce Iran into a meeting in Doha with them to which Iran had never agreed and rejected:

But in the modern information war analogue to the question, “If a tree falls in the forest and no one hears it, has it made a sound?” what if “If you are dissed but the media that matters to you pretends otherwise, have you been humiliated?”

Mind you, Trump has such an extreme need to dominate that once he finds out about this slight, he is likely to get all bent out of shape on Truth Social. Right now, he is preoccupied with nursing his rage over his Supreme Court loss on birthright citizenship. This is the latest tweet I could find from him on the Middle East:

But more important, the meetings the Iranians had set in Doha were to get $6 billion in frozen funds held in Qatar released, as had been agreed under the Biden Administration and the US of course reneged. Doha News’ Facebook page has a short video of the Qatar foreign ministry spokesperson basically throwing up his hands. He says Qatar is just the middleman, and the transfer of funds has not yet occurred. Moreover, the Qatar spokesman say Iran was to use these monies in accordance with that deal, only for humanitarian purposes, meaning there were strings attached.¹ So the Trump team might be trying to hang its hat on the old Biden deal to say it can restrict Iran’s use of these monies.

From the Doha News article, Qatar confirms no high-level U.S.-Iran talks in Doha, clarifies status of $6bn frozen funds:

During a weekly briefing on Tuesday, Qatar’s Foreign Ministry spokesperson Majed Al Ansari stated that while Doha continues to facilitate diplomatic engagement, no direct negotiations between Washington and Tehran are taking place.

“There is no high-level meeting currently scheduled between the US and Iran,” Al Ansari confirmed….

On the issue of Iranian assets, Al Ansari addressed reports concerning the potential release of $6 billion in frozen funds.

He confirmed that Qatar continues to act solely as a financial intermediary under a 2023 agreement between the United States and Iran, which established a humanitarian channel for the use of the funds.

“Qatar does not own these funds. It is only acting as the financial intermediary to manage these accounts within the framework of this agreement between the parties,” Al Ansari reaffirmed.

He added that any transfer of funds depends on mutual agreement between Washington and Tehran and progress in negotiations, which has not yet occurred.

So despite Iran scoring a PR win by blowing off the truly dreadful Kushner-Witkoff tag team, it still does not have any of its frozen funds. Recall that Iran had earlier attempted to have the US return some as a condition of entering into the Memorandum of Understanding.

So aside from the US ending the blockade and giving Iran oil sanctions relief so it can sell its oil without hassles, Iran seems to be nowhere on getting the US to honor the MOU.

It looks as if Iran assumed because $6 billion was formally in Qatar’s possession and had been agreed to be returned in a Biden era deal, that it would be best place to set the precedent of the US returning frozen funds because it could be spun in a way by the Trump team to be less controversial. But instead, the US is pointing to terms in that Biden deal that restrict the use of the assets to “humanitarian” purposes, which translates into the US restricting/supervising their use.

Not only is Qatar backing that position, but it seems further to be falling in line with the US position that there has to be negotiation progress on other issues before it can free up the funds. See from the Qatar remarks in footnote 1:

…the matter of transferring the funds or not is done according to mutual agreement between both parties and according to progress of the negotiations, which has not happened so far.

And the US seems to be further holding up discussion of any other frozen asset releases until this $6 billion is settled.

And recall that the US gave Iran a 30 day waiver for its oil at sea during the war. That was because the US wanted to keep oil supplies as high as possible, given the givens, to contain prices. So this area of compliance is in the US’ interest.

Reports on whether the US is even withdrawing its extra forces are contested. Larry Johnson points out in a fresh talk with Nima that Pete Hegseth signed an order to pull out forces and that all the military flight activity reported on Twitter is presumably pursuant to that, as opposed to bringing more assets and men in. Daniel Davis has also said he has heard about redeployment order having been issued.

Yet DropSite News is one of the most highly connected news outlets in the region. This is admittedly a remark in passing but Ryan Grim is part of the reporting team even though he was not on in this segment. Breaking Points reports a force buildup yesterday’s show (see at 11:20, showing a tweet from MintPress):

We’ll turn in a minute to the various accounts of Iran and Oman discussing possible Strait of Hormuz arrangements. The short version is Oman is sticking to UNCLOS, which it has signed. Crudely speaking, UNCLOS requires that states who have territorial waters that must be crossed to allow passage to commercial vessels to open seas (aks transit passage). UNCLOS severely limits the fees that may be charged to vessels transiting natural waterways, as opposed to canals or waterways where investments in dredging were made to facilitate traffic.²

One wonders where Iran thinks these talks and the much bigger fight for regional dominance are going.

On paper, Iran has all the leverage, given its ability to kill the global economy by choking Strait of Hormuz traffic. Trump’s sudden surrender to the MOU demands and his remarks that he didn’t want to be the next Herbert Hoover seemed to be an admission that the US recognized the weakness of its position.

Yet Iran should have recognized that the MOU contained promises (or conceded to Iran demands) that the US could not honor.

The US can’t deliver the $300 billion. The MOU does not have the US on the hook for it and the US cannot make non-signatories cough up the money. The US compel other countries, notably the Europeans and any others who are honoring the JCPOA snapback, to give sanctions relief.

It is not impossible but certainly far from easy to compel the Israelis to leave southern Lebanon. The US can remove its forces deployed during the war but has not done so yet.

Even before getting to the fact that the US could never deliver on the MOU in full, US intransigence, as shown with its fight over the Iranian frozen assets and its effort to cement an Israel presence in southern Lebanon by midwifing a potential Israel-Lebanon pact says the US is acting like it still has cards to play, even when independent military and geopolitical experts almost to a person say otherwise.

Does the US believe that it can get enough oil out of the Strait of Hormuz in a tit-for-tat exchanges scenario to escape the oil cliff, based on a belief that Iran does not want to go back to a hot war and will not if the US keeps its provocations below a certain level? Or have members of the Trump team convinced themselves that even if the world economy goes tits up, the US will not be much harmed? Or have the US and Israel convinced themselves that they have a game-changing clever trick up their sleeves?³

Traffic in Hormuz is less than wonderful but there are still transits on the Oman side:

Hormuz traffic holds steady

The Strait of Hormuz remained open and active on 30 June, with 34 verified crossings recorded and traffic evenly split by direction. The dataset showed a broad mix of commercial, energy-linked and support movements, while route visibility remained… pic.twitter.com/cVZHRte4Hy

— Kpler (@Kpler) July 1, 2026

And Lloyd’s List is making optimistic noises. Notice the use of the word “surges” in Shipping sustains pragmatic approach to Hormuz transits amid political uncertainty

• Traffic through Hormuz is growing again following recent US-Iran strikes, with shipowners relying on political guarantees, shifting security corridors and improvised convoys to move vessels through a still‑fragile chokepoint
• Iran and Oman pushing competing control plans for the strait, while US-Iran talks in Doha remain uncertain and fees proposed by Middle East Gulf states threaten to stall any long‑term agreement
• Shipping is adapting through temporary workarounds, including VLCC shuttle operations and dark transits

Hormuz traffic surges as US-Iran talks are set to resume, but a long‑term plan is still elusive and shipping is enacting temporary workarounds not a strategic return

Lloyd’s List in theory should have a better view of what is happening than other outlets. NO1 highlights the divergence in reports on amount shipped: From his latest daily report:

Export figures diverge and both should be surfaced: Iran claims 40-50M barrels since the blockade lifted (~two weeks), which HormuzReport frames as 3.4M bpd, double the pre-war 1.7M; TankerTrackers pegs the June monthly average at 1.66M bpd.

____

¹ Starting from the top:

First of course, regarding the USD six billion, which are the Iranian frozen funds, these date back to an agreement announced in 2023 between the United States and Iran to establish a humanitarian channel here in Qatar. The original purpose of these funds is to be used within the framework of purchases for humanitarian purposes according to the agreement that was in place at the time.

As you know, as stated in the [US-Iran] memorandum of understanding, the issue of frozen funds is certainly part of it, but the matter of transferring the funds or not is done according to mutual agreement between both parties and according to progress of the negotiations, which has not happened so far.

² A useful short recap from Maritime Cyprus:

Natural Straits: International Waterways and the Right of Transit Passage

In contrast, a strait is a naturally occurring narrow passage connecting two larger bodies of water that is customarily used for international navigation. These waterways predate modern states and are regarded as part of the global maritime commons.

• Authority to Charge Fees: Under UNCLOS, coastal states generally may not impose general transit fees or tolls on vessels exercising the right of innocent or transit passage.
• Right of Transit Passage: Part III of UNCLOS grants ships and aircraft the right of “transit passage” through straits used for international navigation. This right allows continuous and expeditious transit without impediment, suspension, or taxation solely for the act of passage. Coastal states retain the right to regulate for safety, pollution prevention, and other legitimate purposes, and may charge for specific services rendered (such as compulsory pilotage or emergency assistance), but not for mere passage.
• Prominent Examples: The Strait of Hormuz, the Strait of Malacca, the Strait of Gibraltar, and the Bab el-Mandeb Strait.

The Strait of Hormuz: Legal Limits on Iranian Claims

Recent statements by Iran regarding the possible imposition of transit fees in the Strait of Hormuz have raised concerns in global energy markets. Because Iran has not ratified UNCLOS, it is not directly bound by the treaty’s transit passage regime. Nevertheless, legal experts maintain that a general toll on international shipping would still violate broader principles of customary international law and freedom of navigation, which predate and exist independently of UNCLOS.

The Strait of Hormuz constitutes a classic international strait, serving as a critical chokepoint through which approximately 20% of global petroleum and liquefied natural gas transits. Any unilateral attempt to charge vessels simply for passage would likely be viewed as an unlawful interference with international navigation rights and could trigger significant diplomatic and legal challenges.

Coastal states may, however, recover costs associated with concrete services—such as search and rescue capabilities, navigational aids, or environmental protection—provided the fees are non-discriminatory and proportionate.

As an aside, it is weird to see Iran insist that the MOU gives them control of the Strait of Hormuz when even if you accept their reading of the opening line (which I do not and others say it is at best ambiguous) when the later section, on what happens after the 60 days, invokes international law and other concepts that do not support Iranian control.

In addition, the MOU did NOT give Iran exclusive control even for the first 60 days. There is nothing in the text to support a claim of exclusivity. In fact, one can read the “best efforts” language as setting the stage for action by other parties if Iran does not perform. In additional, neither Iran nor the US can make legally valid commitments over Omanian territorial waters.

³ I am not even remotely suggesting that the US and Israel have a show-stopper. But this seems to be their thinking, that they can manage to escape the consequences of their present course of action: