The U.S.-Iran memorandum of understanding to end the war with Iran is as feeble for U.S. and allied interests as the war was foolish. The MOU provides Iran with immediate, significant financial benefits and defers the instrumental question of Iran’s nuclear program to future talks. As the U.S. intelligence community has assessed, it is highly unlikely that Iran will make substantive nuclear concessions.
The Trump administration disputes this. It insists the MOU does not front-load any significant benefits to Tehran. Administration officials claim that in return for removing U.S. sanctions and enabling international investments into Iran, the Islamic Republic must first verify that it has ended its multi-decade nuclear threat. At the White House on Thursday, Vice President JD Vance was challenged on this point. A journalist noted that the MOU’s restoration of Iranian oil exports would feasibly allow Iran to generate millions of dollars to fund terrorism.
Vance rejected this suggestion. As he put it, “The No. 1 thing is that we actually see where the money moves now because of what we’ve done with the financial sanctions. We actually know where the money’s going to move. And so, we have great confidence that we’ll be able to see if they try to fund terrorist organizations. We’re going to be able to see that.” Vance added that when it comes to suggestions that Iran’s selling “a few million dollars’ worth of oil is going to fundamentally transform the Iranian economy, that’s just not true.”
Vance’s contention is wholly inaccurate on two levels.
First, Iran is adept at moving money secretly. And while Vance is correct that the United States has excellent insight into Iranian financial holdings, monitoring financial flows becomes very difficult when the money starts actually being distributed. Moreover, Iranian officials have stated openly that they intend to use their new oil revenues to reconstitute their military. Indeed, this reconstitution is already underway at a greater speed than had been anticipated. This begs a question: What is the U.S. going to do when Iran starts pumping money into its Islamic Revolutionary Guard Corps Quds Force (responsible for numerous assassination plots against U.S. officials)? Or into its MOIS intelligence service (responsible for similar plots)? Or into the Lebanese Hezbollah? Or into Hamas? Or into its proxies in Iraq?
Considering Trump’s desperation for this peace agreement and the associated reopening of the Strait of Hormuz energy chokepoint, it seems highly unlikely the U.S. will abandon the MOU and recommence military operations when the U.S. learns Iran is doing just this. And it is a question of when, not if.
The second problem with Vance’s claim centers on his suggestion that Iran is now going to be able to sell “a few million dollars’ worth of oil.” Estimating current oil prices, stockpiled oil that Iran has stored during the U.S. blockade, and its oil export capacity, Iran will likely earn between $7 billion and $10 billion in oil revenues over the next 60 days. The actual figure depends on how much oil Iran can actually get to sea. Regardless, the revenues will be a lot more than “a few million dollars.” A lot of money that Iran will use both to stabilize its collapsing economy and to reinvigorate its regime raison d’être: the exportation via violence and patronage of its Khomeinist ideology, and of attacks against its enemies in the Middle East and beyond.
The Trump administration cut this deferential MOU with Iran because it wanted the Strait of Hormuz open, gas prices falling, and economic stability restored. And it wanted these things before the midterm elections heat up. Whatever you think of those rationales, they have some logic to them.
There is, however, no logic in suggesting that Iran will not use a sizable portion of its impending oil revenue to pursue the regime’s malevolent agenda. Pretending otherwise does the office of the vice president and American brains a disservice.