While the ink is still wet on the US–Iran memorandum of understanding, its architects are already squabbling over what it actually means.

To bring both sides to the table, it took 107 days of war, an estimated $500 million a day in lost oil revenues for Iran, and a global energy shock that pushed the price of the oil benchmark Brent onto $120 a barrel plus the assassination of Iran's Supreme Leader. President Trump claimed Sunday evening on Truth Social that the U.S. had reached an "agreement" with Iran, which would see the end of the conflict and the reopening of the Strait of Hormuz on June 19 in Switzerland, when a formal signing ceremony will be held. The presidential grandstanding was a cover for how contentious the facts behind it were.

It's a 14-point memorandum of understanding, not a final nuclear deal, not a complete ceasefire on all fronts, and not a treaty. It provides a 60-day period to negotiate a broader nuclear pact, with intelligence officials already expressing fears that Iran may be able to squeeze economic gains out of it without meeting key commitments Washington is after on the nuclear front. It's not a little asterisk. It's the main theme throughout all evaluations of this moment.

The intelligence problem no one wants to talk about

CIA Director John Ratcliffe briefed the President and senior officials on evidence collected by US intelligence agencies that Iran does not appear to be ready to make the nuclear commitments that the U.S. is seeking in any final deal. The assessment, which was first reported by Axios and later confirmed by several media outlets, was no passing comment but rather an examination of what Iranian officials were telling their own negotiating teams privately, and how that differed from what they were signaling to American counterparts.

The intelligence information stated that there seemed to be a gap between the Iranian officials' public and private stances, as they showed one attitude compared to their private discussions. In other words, Tehran was lying to its people, and telling the room something else. That is not surprising in a nation which has four main directions at the same time: the supreme leadership structure, the Revolutionary Guards, the foreign ministry and the parliament. What's remarkable is that the CIA was so convinced of this that they briefed the President on the record not anonymously in a memo, but in a letter signed by their director.

Ratcliffe isn't alone. Secretary of State Marco Rubio and Secretary of Defense Pete Hegseth said they had concerns and questions about the MOU, while Vice President Vance and envoys Steve Witkoff and Jared Kushner pushed for the MOU. By entering the Middle East with its own national security cabinet evenly divided, the administration is thus entering into its biggest gamble in the region in a generation.

What the MOU does (and doesn't) bind to.

As of this writing, the entire document outlining the 14 points has not been made public, although various parts have trickled out. The deal was virtually signed by Trump and Vance and would lift the blockade of Iranian ports, re-open the Strait of Hormuz and initiate 60 days of nuclear talks. For Tehran, Iran's Parliamentary Speaker Mohammad Bagher Ghalibaf signed.

The promises on the issue of Iran's nuclear program are slim and solid. One of the key elements of the deal is that the IAEA and the United States would assist Iran to dismantle its highly enriched uranium stockpile and that is clearly written in the MOU, Vance said. The main proliferation concern with Iran is its highly enriched uranium stockpile, which, over years of violations of the original JCPOA, is nearing weapons-grade levels of enrichment. Under this initial framework, whether that stockpile can be destroyed in a verifiable, time-bound and enforceable way is what the 60-day negotiation is supposed to decide.

The draft plan also reportedly contains extensive sanctions relief, the possibility of releasing Iranian assets that are frozen, a comprehensive ceasefire and an agreement on the Strait of Hormuz. The financial aspect: The MOU suggests a $300 billion fund to be used for reconstruction in the event of Iranian compliance with the IAEA's nuclear requirements and calls for the Strait of Hormuz to be fully reopened within 30 days, highlighting the urgency to ensure the continuity of global supply chains. Vance explained that the money would come from Gulf countries, not the US Treasury a crucial political caveat as the United States is facing backlash at home over any type of cash to Iran.

There are at least three different versions of the MOU text that have been in circulation. They all contain some common elements relating to the reopening of the Strait, sanctions relief for Iran and the door to longer term nuclear talks but they have widely different provisions regarding financial relief to Iran from sanctions now versus later. That's not a semantic gap. It decides if Iran has consolidated its windfall before taking any nuclear concession, or if the sequence is supposed to be that relief is based on actual moves.

The economic "arithmetic" that makes sense of it all

The International Energy Agency has described the closure of the Strait of Hormuz as the "biggest supply disruption in the history of the global oil market. The war is reminiscent of the energy crisis of the 70s and has resulted in extreme shortages of supply, currency fluctuations, inflation, and greater threats of stagflation and recession. This amounted to roughly 40 percent higher energy prices worldwide than they were in pre-war days.

The economic consequences of the Strait of Hormuz's constriction included higher energy prices and a negative impact on economies as a whole, including the United States which saw a incremental cost of approximately $1.50 a gallon higher than before the war. World oil stocks were being drained at an unprecedented rate.

Iran's return of around 2 million bpd of oil to the world market is a significant macro tailwind. The reopening of the Strait makes the risk premium on nearly 20 percent of the world's oil that goes through the waterway less. Insurance premiums for Strait of Hormuz transits increased 15 percent in the past 90 days. The price impact has been much more serious in developing economies like India, southeast Asia and east Africa, for they rely heavily on imports and have small strategic stocks.

The markets have already started to factor in the potential of the deal. The oil price dropped sharply as there was a growing chance the Hormuz strait could open back up with Brent oil dropping from $115 per barrel to $103 per barrel. Equities are rallying, with gains seen in technology and consumer discretionary stocks on hopes for lower energy prices, inflation relief and a normalization of supply chains. The problem is that markets are wagering on a commitment to stick to an agreement not on a CIA director's public assertions that its counterparts might not always mean what they sign.

The Israel complication

In southern Lebanon, where Israeli tanks are reportedly stationed, Iran's foreign minister said that any Israeli presence in the region or Israeli strikes on the country would be a violation of the US–Iran deal. Israeli authorities told Monday that they will maintain their presence in Lebanon. That's the most direct crash course two parties can take towards one another and it sure drops into Trump's lap.

Even though Israel isn't formally party to the deal, it finds itself in a quagmire, in part because it invaded southern Lebanon after Iran-backed Hezbollah fired missiles at northern Israeli towns during the first week of the war. Iran has also demanded that a ceasefire agreement to end the US–Iran front must involve a halt to Israeli military operations in Lebanon. Meanwhile, the IDF has viewed its gains in southern Lebanon as one of the war's highlights and has no plans to cede them because of an agreement between Washington and Tehran that doesn't explicitly mention Jerusalem.

In public, Trump has been lashing out at Netanyahu for his ongoing attacks against Hezbollah and stated that “He's a very difficult guy” and “Netanyahu should be very thankful to us for doing this.” Hezbollah could still threaten to derail the U.S. drive to end its conflict with Iran throughout the region. This is the diplomatic reality today: the most troublesome loose end is not the current state of Iranian enrichment or the tranches of frozen assets, but rather an ongoing parallel war neither Iran nor Israel has signed up to cease.

The JCPOA comparison the administration doesn't want to hear

Over the weekend, the JCPOA comparison was made in each and every TV programme, pushed by each and every host. The administration's consistent response: more verification, no money up front, performance based relief, and leverage of proven military readiness. The critics' consistent response: the JCPOA too forbade Iran from building nuclear weapons; the JCPOA had verification systems; the JCPOA had a wider coalition of countries behind it. Both sides are not completely wrong, per se. The JCPOA did not fail because Iran was violating the fundamental enrichment provisions of the deal, but because it was not politically sustainable: the moment a new administration disliked it, the deal was dead.

Steven Cook, a senior fellow for Middle East studies at the Council on Foreign Relations, put it plainly: "We have been here before only to discover the parties cannot bridge the remaining gaps. Negotiations on the outstanding issues, especially on Iran's nuclear program, will be long and difficult. But with the 60-day clock already ticking, and a CIA director on record saying Iran's intent is not consistent with its obligations, the difficult part has yet to begin.

Here's what the coming 60 days will be a true litmus test for.

Top U.S. officials responded by saying all benefits to Iran would be tied to substantive action, and one official indicated that the U.S. would have a good idea within two or three weeks if Iran was interested in making nuclear concessions. The official said otherwise, the process might come to a standstill before Iran would benefit much. Perhaps the most important sign from the American side is that two to three weeks will be the maximum amount of time until the tripwire is triggered, so that the sanctions relief will not begin to run before verification.

Signing the MOU is the beginning of a legacy-defining ambition, not the end, said Jonathan Panikoff from the Atlantic Council's Scowcroft Middle East Security Initiative. The most likely scenario is that an initial memorandum will come to fruition, but the most difficult negotiations are still yet to come.

The formal signing Friday in Switzerland will be photographed, celebrated and spun differently by every capital that has a stake in it. Tehran will consider it a triumph over maximum pressure. Washington will refer to it as a “vindication of military leverage.” Israel will refer to it as a limitation of its security capabilities. Gulf nations will quietly work out the speed with which Iranian oil will return to the market and how it will impact their pricing plans and OPEC+ deals.

It's really a ceasefire with a number of expensive promises, one of which an intelligence community doesn't believe the other side will honor, and a 60-day period to see if they were right or not.

The formal signing ceremony will take place June 19 in Switzerland. Negotiations in the second phase of nuclear discussions between U.S. envoys Vance, Kushner and Witkoff and Iranian Foreign Minister Araghchi are likely to follow shortly.