The clock the White House started in Islamabad ran out on Monday. The memorandum of understanding that Donald Trump and Iranian President Masoud Pezeshkian signed remotely on June 17 gave the two governments 60 days to turn a ceasefire into a permanent settlement, and the deadline arrived with no negotiations underway, no deal in sight, and a president who says he is in no rush to produce one.
What Trump offered instead of an extension was a demand and a threat. Iran, he said, should surrender. Oman, the Gulf sultanate that has spent weeks trying to broker an arrangement for reopening the Strait of Hormuz, should stay out of the way or expect to be bombed.
What the 14-point Islamabad memorandum actually promised
The agreement was ambitious on paper and thin on enforcement. The full text of the memorandum, disclosed by a senior American official on a call with reporters the day it was signed, opens by declaring the immediate and permanent termination of military operations on all fronts, including Lebanon, and commits both governments to refrain from the threat or use of force against each other.
From there it becomes a list of American concessions with Iranian promises attached. Washington agreed to begin lifting its naval blockade at once and end it entirely within 30 days, to pull forces from Iran’s vicinity after a final deal, to develop a reconstruction and development plan for Iran worth at least $300 billion, to terminate sanctions on an agreed schedule, to issue Treasury waivers for Iranian crude exports, and to release Iranian funds frozen abroad. Tehran, for its part, reaffirmed that it would not build nuclear weapons and agreed to negotiate over its enriched stockpile.
Paragraph three set the timer: a final deal in a maximum of 60 days, extendable only by mutual consent. Neither side consented. The structure collapsed inside a month, both governments accusing the other of violating it, and by July 7 Trump had declared the agreement over. American forces reimposed the naval blockade on July 14.
Article 5 and the fight over who controls the strait
The clause that broke the deal was the one about shipping. Article 5 obliged Iran to use its best efforts to guarantee safe passage for commercial vessels “with no charge, for 60 days only,” to begin demining within 30 days, and to open a dialogue with Oman about the future administration and maritime services of the Strait of Hormuz.
That language settled nothing about the only question that mattered, which was whose maps govern. Oman issued a route hugging its own coastline, backed by Washington. Iran had already published a map pushing traffic toward the Iranian shore and declaring the Omani side restricted. Several vessels that followed the Omani route were attacked at the end of June, the United States resumed strikes on Iranian coastal targets, Iran hit American installations in the Gulf and Jordan in response, and a ceasefire that was ten days old was effectively finished.
A former acting director of the State Department’s Office of Iranian Affairs, Joey Hood, told Al Jazeera in an assessment published as the deal lapsed that the memorandum “was doomed to fail” because it was poorly written and left Iran room to read it as a grant of sovereignty over the strait. Iranian Foreign Ministry spokesman Esmaeil Baghaei took the opposite view of who broke what, saying no talks ever began because of American violations and that the 60-day deadline had therefore become “entirely moot.”
Surrender, and no timetable
Trump used the expiration to escalate rather than to sue for terms. Speaking by telephone on Monday to Fox News chief foreign correspondent Trey Yingst, who reported the remarks without publishing audio of them, the president said Iran must “put up the white flag of surrender” and indicated he was content to let the blockade grind the Iranian economy down until it does.
“I have no time schedule. I’m not in a hurry,” Trump said. He rejected the theory circulating in Tehran and in Washington that he will fold before the November midterms to avoid higher pump prices, saying flatly that “the midterms have nothing to do with my thinking.” He claimed a direct backchannel to Iran’s Islamic Revolutionary Guard Corps despite Tehran’s public insistence that it is not speaking to the United States, and delivered the line that captures his read of the standoff: “They’re good poker players, but they’re dying.”
Iran spent the same day advertising a different negotiation entirely. Baghaei said Tehran and Muscat had reached an agreement in principle on joint control of the strait, including a route map for transit, with a joint declaration to follow.
The threat to bomb a mediator
That announcement is the context for the threat against Oman, and it is the part of Monday most likely to be misread as impulsive. Oman is not a hostile state. It is a longtime American security partner that has served as the region’s back channel to Tehran for decades, and it has spent this war presenting itself as an impartial mediator.
It has also, in Washington’s view, been quietly negotiating a bilateral arrangement that would hand Iran a permanent role administering an international waterway and charging for passage through it. Iran and Oman announced a joint Strait of Hormuz Committee in June to draw up plans for future management, associated services, and the fees for those services. The United States has opposed any toll regime on the strait from the outset, and Trump has now twice said he would use force to stop one, warning during a Cabinet meeting in late May that Oman would “behave just like everybody else. Or else we’ll have to blow them up.”
“If Oman gets in the way, we’ll bomb the s— out of them,” he told Yingst on Monday. Whether that is a serious operational threat or a bargaining posture aimed at collapsing the Muscat track before it produces a signed document, it accomplished something immediately: it put every Gulf capital on notice that a deal reached without Washington will not be treated as a deal at all.
Why a single waterway decides how much Americans pay
The reason a president is threatening an ally over shipping lanes is visible in the federal government’s own energy data. The Energy Information Administration’s analysis of world oil transit chokepoints, last updated in March, records that in the first half of 2025 roughly 20.9 million barrels a day of crude and petroleum liquids moved through the Strait of Hormuz, about a fifth of global petroleum liquids consumption and a quarter of all seaborne traded oil, along with more than 20 percent of the world’s liquefied natural gas trade.
The same analysis explains why there is no easy detour. Saudi and Emirati pipelines could bypass the strait with roughly 4.7 million barrels a day of capacity, a fraction of what normally passes through it, and Iran’s own alternative terminal at Jask handles a rounding error by comparison. Close the strait and the barrels do not simply take another road.
That is the leverage Tehran is betting on, and it is why the administration keeps insisting the passage will be reopened on American terms rather than purchased on Iranian ones. A toll conceded once becomes a toll forever, collected by a government the United States is currently at war with, on a waterway that sets the floor under the price of nearly everything moved by ship. Sixty days after Islamabad there is no final deal, no reopened strait, and a president who has decided that waiting costs him less than conceding. Tehran is betting the November midterms say otherwise.
This article was produced with AI assistance and reviewed by a human editor prior to publication.
Grant Mercer covers market dynamics, business trends, and the economic forces driving growth across industries. His analysis connects macro movements with real-world implications for investors, entrepreneurs, and professionals. Through his work at The Daily Overview, Grant helps readers understand how markets function and where opportunities may emerge.
