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Iran War: Trump Declares MOU Over After Biggest US-Iran Exchange of Strikes Since Signing in Struggle Over Strait of Hormuz Control; US Suspends Iran Oil Sanction Waiver

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[Today’s Iran war post was pretty much complete at launch time, so I expect to be done at 7:30 AM EDT unless there is a big new development. Please return or refresh this page then]

After both the US and Iran moved kinetically up the escalation ladder, with the tit-for-tat was larger than the last dustup over Iran attacks on Oman-side vessels, Trump said at the NATO summit in Ankara that he he has had it with the MOU process. From the Aljazeera landing page:

And from its live feed:

  • US President Donald Trump says the ceasefire deal with Iran is “over”, adds dealing with Tehran is a “waste of time”.
  • His comments come after the US said it launched “powerful strikes” against Iran following attacks on three ships in the Strait of Hormuz, including Qatari and Saudi tankers.

    • Trump on the MoU: ‘I think it’s over’

    The US president has just told reporters at the NATO summit in Ankara that he thinks the memorandum of understanding with Iran is “over”.

    “It’s just a waste of time dealing with them,” said Trump….

    US President Trump has told reporters the following:

    • We hit them [Iran] very hard last night.
    • I told them that every time you hit, we hit, and, of course, they’re dirty players, so they go after everyone, probably including me.
    • We don’t like them. I don’t like them. They’re evil people, and it’s the denuclearisation of Iran. And we’re going to denuke it.
    • I’m not happy with NATO because of the fact that they didn’t want to help us with the number one state-sponsored terror, that’s Iran.

A clip of Trump’s key statement:

We will not dwell on it here but Trump also had a hissy with respect to Spain, saying he will cut off all trade.

A later entry in the feed suggested this Trump declaration might be posturing:

But there were other comments in there: “I might let my wonderful negotiators keep talking.” So, is this just tough talk from Trump, trying to put a line down and say, “this is unacceptable and I’ve shown you my response”? Or does this mean he is really tearing up the Memorandum of Understanding that was agreed on about three weeks ago?

Negotiations had resumed after the previous exchanges of fire, but were halted for the funerals of the former Supreme Leader and other war martyrs. Qatar has planned to set new dates for the earliest possible window after the ceremonies conclude on July 9. Iran International on Twitter cited an Iranian official stating that

the Supreme National Security Council as not having yet decided whether to carry on with the talks

:

A lawmaker said on Wednesday that the United States had violated a memorandum of understanding by rejecting Iran’s role in managing traffic through the Strait of Hormuz.

Alaeddin Boroujerdi, a member of parliament’s National Security and Foreign Policy Committee, said the agreement and talks had established that shipping through the strait would take place “under the supervision and management of the Islamic Republic of Iran, specifically the IRGC Navy.”..

He also added that the country’s Supreme National Security Council would decide whether to continue negotiations with the United States after the latest strikes.

Keep in mind that at this point, Iran appears to have made the latest round of attacks, in response to the strikes on Iran territory. I do not see evidence of a new US retaliation but that may be coming. First from PressTV in IRGC strikes 85 US military targets in ‘initial’ retaliation, downs MQ-9 drone

The Islamic Revolution Guards Corps (IRGC) says it struck 85 US military targets in Bahrain and Kuwait with missiles and drones in an initial response to to American aggression against Iranian territory.

The IRGC, in a statement issued Wednesday, said the strikes hit facilities at Port Salman, the US Fifth Fleet’s area in Bahrain, and Ali Al Salem Air Base in Kuwait. It also announced the downing of an MQ-9 drone, saying the aircraft attempted to interfere with the operation before it was shot down.

Per Aljazeera’s live feed about 7 hours ago:

  • Air raid sirens blare for a second time in Bahrain after Iran said it launched retaliatory attacks over the US bombardment of its Hormozgan province.
  • Kuwait has also announced that it is confronting hostile drone and missile attacks.
  • Iran’s Islamic Revolutionary Guard Corps (IRGC) says it “destroyed 85 US military installations” in Bahrain and Kuwait.
  • US Central Command (CENTCOM) says it hit more than 80 targets inside Iran, and that the strikes were in response to attacks on three ships in the Strait of Hormuz on Tuesday.
  • Iranian media say most sites hit were civilian, including fishing piers and a telecommunications tower, and that several people were taken to the hospital after a strike on Sirik.

    • In the “fog of information” category, there are Twitter claims of a fourth strike on a tanker, allegedly per UKMTO, but I have yet to see them make a live feed:

    And fresh entries from the Middle East Online live feed (in the last hour), so it appears Iran strikes are continuing:

    Explosions heard in Bahrain as Iran says any site enabling US attack is ‘legitimate target’

    Several explosions rang out across Bahrain, an AFP correspondent said, after authorities sounded air raid sirens to warn of an attack.

    “Loud” blasts were heard in the north of the island state, the correspondent said, in the first incident since Bahrain reported intercepting Iranian drones and missiles on June 28.

    Iran’s military, meanwhile, warned that any site enabling the United States to attack the country would be considered a “legitimate target”.

    “Any support provided to the aggressive American army to violate the sovereignty and territory of Islamic Iran will be a legitimate target of the armed forces,” the military said in a statement. (Reporting by AFP)

    Mind you, with Trump’s intense need to be always seen as the driver of events, he may well have sensed that the Iranians were about to cancel the agreement and he wanted the US to quit rather than be fired. But earlier, Trump had been merrily tweeting some of the US strikes:

    The Bloomberg landing page shows that oil prices are up by over 6%. From its account, Trump Says US Ceasefire With Iran Is ‘Over’ After Strikes:

  • US President Donald Trump said his tentative ceasefire with Iran is done, raising the prospect of a renewed military conflict between the two countries.
  • Trump’s remarks came after the US launched a new wave of strikes against Iran and revoked a waiver that allowed the sale of Iranian oil, in response to recent attacks on ships transiting the Strait of Hormuz.
  • The developments marked the most serious threat to the interim peace deal, with the US blaming Iran for the attacks on shipping, and Tehran saying the military strikes and waiver revocation violated the agreement between the two countries….

    • Oil prices, which touched a peak near $125 a barrel in late April, had returned toward pre-conflict levels this month on signs of a recovery. But following the Treasury decision, oil prices surged again on Tuesday.

    Many markets are having a sad:

    This Bloomberg article included “A US official said negotiators would continue to work toward a final deal” but with Trump at NATO and it still being before the business day in the US, official Washington is likely not yet to have gotten any marching orders from Trump. But Secretary of Defense Hegseth seems to feel the need to be on deck:

    With Iran having landed the latest blow, what happens during the US day will be telling, as in whether the US engages in more threat display or sees fit to hit back.

    But recall in addition to what CENTCOM said were 80 strikes on Iran targets on Queshm and Larak Islands and the Bandar Abbas port (with Iran reporinng 85 counter-attacks), the US is also revoking the sanctions waiver on Iran oil sales as of July 17.

    As Iran was quick to call out, this sanctions reversal was yet another US breach of the MOU, although it had the effect of also showing this sanctions relief, and potentially most of the relief that the US was planning to provide, was on the cheap, as in mere waivers that could be quickly unwound, as opposed to measures that would cancel the underlying restrictions.1 The Trump team may have felt this was a viable move now, since they no doubt believe their own oil glut story and so believe they do need to get Iran oil to the market to keep oil prices down. Those who watch oil inventories would beg to differ, since the Strategic Petroleum Reserve drawdown last week was 6.2 million barrels.

    From the Iran perspective, the cancellation of the oil waiver is more significant in negotiation/power terms than in economic terms. Iran can still sell the oil it has at sea at favorable prices, even factoring in the expected sanctions discount. But the termination of the waiver is not just yet another demonstration of US bad faith dealing, but also another slap, of treating Iran as a party than can be trifled with.

    But the US has not reimposed the further world-economy-harming blockade on Iran.

    This escalation and presumed end of the attempt to reach a settlement comes as other pieces of the equation are moving. Trump had just announced that he intends to sell Turkiye F-35s and also end (as in really end) the sanctions against Turkiye. This has enraged Netanyahu and Israel, since Turkiye is behind only Iran2 on Israel’s official enemies list. Netanyahu is set to come to Washington DC next week to meet Trump and likely members of Congress. Will Netanyahu succeed in demanding that the US really really owes him one after strengthening its ties to a country Israel sees as an opponent? And in particularly, now is the time to teach Iran a lesson?

    But others speculate that the F-35s are a big fat bribe:

    The reason I doubt that Erdogan would do all that much is he is fabulously wily. Mixing it up with Iran would mean taking some sort of action now, while the F-35s come later….which could be never. Why take risk on Trump completing his part of the deal? Although more symbolic/optical moves are in a different category.

    And just after I penned the above paragraph, corroboration of sorts in a new tweet:

    Another part of the equation is that the Gulf States had been slowly coming to grips with the idea that they would have to find a modus vivendi with Iran, given that US security was worse than useless. That seemed to be happening with the Saudis and even later the UAE denying the US the use of their airspace. But the Gulf States are not on board with the Iran plan to control Strait of Hormuz traffic, as shown by their statement after a meeting with Marco Rubio. As much as they are furious with the US, they do not want to become captives to Iran.

    Given Iran’s insistence on keeping control of the Strait of Hormuz, along with Professor Robert Pape’s explanation of how Iran’s paramount objective is building power, the idea that there was some way Iran and the Gulf States could share control seemed vanishingly unlikely. Nevertheless, from Trita Parsi’s generally unduly optimistic How the US-Iran fight in the Strait of Hormuz can be resolved before it blows up the MOU:

    The compromise discussed before the talks were suspended offers a sensible way out. Requiring vessels to notify both Iran and a designated GCC maritime authority would defer the sovereignty dispute without prejudging its outcome, allowing commercial traffic to continue while negotiations over a permanent arrangement proceed. Sacrificing the entire MOU—and the far more consequential regional framework it could ultimately produce—over the question of who nominally manages the Strait for the next few weeks would be a costly and unnecessary mistake.

    To counter Parsi, Professor Pape has said that Iran cannot (and needs not) to make concessions, that they lay the groundwork for further concessions. Iran would not buy for a second that letting GCC states play a hand in traffic management “would defer the sovereignty dispute without prejudging its outcome.” It would become the new normal, putting Iran in the position of having to claw back any change in status.

    The latest set of attacks, with Saudi, Qatar and UAE vessels as the victims, look to have set any rapprochement back. From the Gulf News live feed

    Gargash: Iran’s attacks show failure to commit to de-escalation

    Dr Anwar Gargash, Diplomatic Adviser to the UAE President, has said Iran’s reported attacks on commercial vessels in the Strait of Hormuz and repeated aggression against Bahrain and Kuwait demonstrate that Tehran is unwilling to commit to de-escalation or move beyond the recent conflict.

    In a post on X on Wednesday, Gargash said the reported attacks on Saudi and Qatari commercial vessels in the Strait of Hormuz, together with the repeated acts of aggression against Bahrain and Kuwait, were “a clear indication that Tehran is incapable of adhering to the requirements of de-escalation and turning the page on war”.

    “The Gulf Arab states cannot continue to be the target of Iran’s oscillation between the logic of escalation and the path of rationality, stability and peace,” he said.

    Gargash’s remarks came after Saudi Arabia and Qatar separately condemned reported attacks on commercial vessels linked to the two countries while transiting the Strait of Hormuz, with both holding Iran responsible and warning that the incidents threatened international maritime security and global energy supplies.

    Critically, Oman has joined in the censure of the latest Iran strikes on shipping as well as its response to US retaliation. From Aljazeer’s live feed:

    Oman condemns attacks on Bahrain, Kuwait and commercial ships

    Oman’s Foreign Ministry has released a statement condemning Iran’s attacks on sites in Bahrain and Kuwait as well as on two commercial ships from Saudi Arabia and Qatar in the Strait of Hormuz.

    The statement affirmed Oman’s solidarity with its neighbouring countries and said increasing military tensions in the region threaten Oman’s safety and security. It also said the attacks threaten global trade networks and energy supplies.

    Oman urged all parties involved to exercise “self-control”, refrain from escalating the situation and return to diplomacy.

    And before you think this is just talk, the Saudis let the US use their base in this operation, albeit as a presumed fallback:

    More on the impact of the cancellation of the sanctions waiver on Iran, via Bloomberg reporter Javier Blas on Twitter:

    A reminder of what the US waiver revocation on Iranian oil sales means — and doesn’t mean:

    Iran can still sell its oil if it finds a willing buyers (and China has been in the past, and will be again). Yes, Iran will need to discount its oil, but that would be mostly offset by the rise in oil prices triggered by the fresh hostilities. The biggest problem for Iran? It would have to use (again) non-US dollar settlement.

    Put it all together, and Tehran would be able to sell the ~60 million barrels it has put on the water so far since the blockade was lifted, at relatively good prices (~$65-70 a barrel), making probably ~$4 billion.

    Only a return to the US Navy blockade would stop Iran from selling its oil. But that means a new war.

    Needless to say, ship operators do not want to be in a war zone. From Middle East Eye’s live feed:

    Four oil and gas tankers turn back from Hormuz after vessel attacks

    Three Qatari-controlled liquefied natural gas tanker (LNG) tankers were inching westward towards the Strait of Hormuz before changing course to turn away late on Tuesday, data from analytics firms Kpler and LSEG shows.

    All three tankers were empty and heading towards Qatar’s Ras Laffan export facility to load cargoes..

    LSEG and Kpler data also showed the Indian-flagged very large crude carrier (VLCC) Lila Vadinar, which is carrying two million barrels of Kuwaiti crude loaded late last week, made a U-turn off the tip of Oman in the Strait of Hormuz on Wednesday.

    And:

    A few additional information tidbits:

    From CNN in Exclusive: US commanders bypassed warnings about outdated intelligence ahead of strike that hit school in Iran, sources say:

    Senior US military commanders bypassed warnings in critical databases that intelligence about potential targets in Iran was severely out of date and approved some strikes — including one that hit a school, killing nearly 200 hundred children and adults, according to three sources familiar with the decision-making process.

    Messages indicating the intelligence was based on years-old intelligence that needed to be re-vetted were embedded in a system used for developing targets and required a senior officer to approve adding a site to the strike list, according to the sources.

    The decision by senior commanders to ignore the warnings was made for “expediency,” two of the sources said, in a rush to provide targets at the start of the war. But it also directly contributed to the accidental strike on the school, the sources added.

    The strike killed at least 168 children and 14 teachers, according to Iranian state media. Those numbers would make the strike one of the worst civilian casualty incidents in recent US military history. The US military launched an investigation in the days after the strike.

    I anticipate, if anyone asks Scott Ritter about this finding, they’ll get another blistering take. He called out the strike at the time, saying in his days, targets were relentlessly re-vetted since it was well known information could be stale.

    And last but not least:

    Done for today! I suspect we’ll have a lot of noise, and maybe even some signal, from US/Anglosphere pols and pundits during the US business day. We’ll see what shakes out soon enough.

    _____

    1 Please forgive us for not belaboring as to how this might be done, since it varies. For instance, the US would need the backing of the E-3 to unwind the JCOPA sanctions (still observed by some European states), when France’s foreign minister said approval was conditioned on the Europe being involved in the settlement, and insinuated that the pact would need to limit Iran’s ballistic missiles and support for “proxies.” The bigger impediment is the Trump team lacks the competence, the support and the tenacity to do anything hard.

    2 Remember that Israel does not deem Hezbollah and Hamas to be independent actors.

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    5 comments

    1. Yves Smith Post author

      All done on the early side for this feature. If you started reading before the time of this comment, please reload the page and re-skim.

      Reply ↓
    2. The Rev Kev

      Trump really wigged out about the Iranians being unwilling to surrender to him and let him win the war. He even made it personal and called the Iranians ‘scum’ – twice. Not much different when last year he called Iranians ‘animals.’ For some reason Trump really has got a chip on his shoulder about Iranians and has made it personal.

      I notice that good old Pete Hegseth has cancelled his trip to Israel. Maybe he realized that the war is back on again and that Israel may soon be taking hits from Iran. And that the life of Mr. and Mrs. Hegseth’s favourite son Peter was too valuable to risk hanging around a live fire zone. Those are some real warrior values there, Pete.

      Reply ↓
    3. ProNewerDeal

      I dissaprove of all Presidents from Reagan onwards in this 1981-now neoliberal/Reagonomics era. Perhaps Biden was the least worst with some positives including Lina Khan/FCC, pro-union NLRB labor appointees CFPB/financial regulation; & alongside Biden’s negatives of killing the Public Option & 15 Federal min wage he camplaigned on, & funding Isra3l’s Gaza G3noc1de.

      However imho ConManDon Trump is definitely the worst & far worse than the others. There is the more severe fasc1st actions that are worse than Bush43 or any other Reagan to Biden neoliberal Presidents, including the no-due process detaining of undocumented immigrants (although some turned out to be document immigrants or citizens) with a reported 40 that died under custody & 4000 missing – sounds like a milder version of Chile/Pinochet “disappering” thousands of people.

      But a 2nd point I don’t see others remark on the Captain Chaos nature of ConManD0n. He agrees to this MoU & then disregards it (15?) days later. How are US workers, US companies, & foreigners supposed to plan for anything with ConManD0n’s chaotic nature? What are consumers & businesses supposed to do with uncertainty of oil, food (from fertilizer shortage) prices, among other key items? Is ConManD0n’s chaotic bs reducing world GDP & increasing excess deaths?

      Consider that ConManD0n does do crazy fasc1st actions, like protect the IC3 officer murders of Renee Good & Alex Pretti. So when ConManD0n threatens Greenland or suddenly threaten to raise tariffs to 100%+ but then fails to follow through or backs down, I can’t fault the EU (on Greenland) or corporate factory new site execs (on tariffs) for preparing for the worst & the ConManD0n threat, because ConManD0n in several cases has done several crazy chaotic fasc1st actions.

      Reply ↓
    4. GlassHammer

      So…. out of time to avoid the iceberg of “depleted strategic reserves”.

      Out of time for the iceberg of “production slow-down” in various countries embedded in global supply chains.

      Out of time for food prices increasing and it’s going to be a larger multi-season hit.

      If your house needs heating oil get it now and if your house needs a few months of food get it now.

      Reply ↓

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