Expert Explains | Despite talks, why US and Iran are still trading blows — and may keep doing so

The same pattern of attacks was also seen on June 26 and June 27 — Iran preventing transit through the Strait of Hormuz for commercial ships that did not coordinate with it, the US Central Command bombing Iranian targets and Iran hitting US bases in Bahrain and Kuwait.

This familiar cycle of escalation has threatened the shaky ceasefire between the two countries and jeopardised negotiations to turn the June 18 Memorandum of Understanding (MoU) (MoU) into a permanent peace deal.

While Trump’s comments on Wednesday have increased this uncertainty, he left a window open by saying that US representatives can continue negotiations. But he added: “They can talk, but I think they’re wasting their time.”

Although Trump has at times stepped back from threats he has made against Iran, oil prices surged and stocks fell after his latest remarks, Reuters reported. The report, citing a source, said Trump did not repeat his comments about the interim deal being over when NATO leaders met later at the summit.

These exchanges between the US and Iran are an immediate effect of the differences between Tehran and Washington over the Strait of Hormuz’s future administration. But that’s hardly the only factor at play here.

The Strait of Hormuz question

Under Article 5 of the MoU, the long-term administration of the Strait of Hormuz is to be determined jointly by Oman and Iran, “in line with applicable international law and the sovereign rights of coastal states of the Strait”.

By June 23, Iran and Oman jointly declared the creation of a working group “to reach agreement on the future administration of navigation in the Strait”. While this meets Iran’s objective to prevent the strait’s return to its pre-war status, Oman’s cooperation remains crucial for Tehran.

So far, Muscat’s rejection of flat tolls in the strait (prohibited by Article 26 of the UN Convention on the Law of the Sea) has resulted in an arrangement where ships pay coastal states for potential services rendered — which a liberal interpretation of UNCLOS Article 43 allows. While both states differ over whether such payments are to be voluntary or mandatory, it is evident that the structures for the strait’s long-term administration are already being built.

It is the short-term administration of the strait which is a recurring conflict trigger.

Under the MoU, Iran is to allow unconditional passage to all commercial ships for 60 days. For Washington, this means a preclusion of any coordination with Iranian authorities.

This interpretation was furthered through an International Maritime Organization-led (and US and Oman-backed) plan that sought to create a temporary southern route through Omani waters and another northern route close to Iran’s Larak island in the strait for commercial passage and rescue of stranded vessels.

The Strait of Hormuz

The main traffic separation scheme in the central channel remains shut, pending mine clearance. But Iran’s June 25 strikes on vessels transiting through the southern route (and hence not coordinating with Iran) and subsequent exchanges with the US proved what Iranian Foreign Minister Abbas Araghchi ultimately asserted on June 28 — that Tehran would not accept any “new or separate arrangements from those currently being pursued” for the Strait of Hormuz.

So, even as the long-term future of the strait is clear, the short-term is not. Iran’s sensitivities over any attempted new route (however temporary) draw from the Strait of Hormuz’s new value as its main instrument of leverage. This will have to be reconciled with Washington’s preference for unhindered passage during the 60-day negotiation period, while continuing to adversely affect the frequency and efficiency of technical negotiations.

This, in turn, risks prolonging the 60-day window while shipping in Hormuz continues to remain disrupted. The IMF’s seven day moving average for May-June in the Strait varied between six and 12 ship crossings. The statistic for the same period in the previous year was 104-115.

Iraq and Lebanon

While the short-term nature of this Hormuz-focused difference can theoretically ensure that US-Iran military clashes do not become a permanent feature, it is categorically clear that a severe lack of trust with the US necessitates continual Iranian assertion to ensure that Washington does not deviate from MoU terms until negotiations for a final deal begin.

Central to this is Washington’s need to shape regional developments enough in the short term to ensure that Iran’s long-term gains (beyond Hormuz) are curtailed. The volatility this creates is evident across regional states.

The site of an Israeli airstrike in Lebanon last month. AP

In Iraq, for instance, both the US withdrawal and Iran’s entrenched presence through the Popular Mobilization Forces creates fresh ground for long-term Iranian influence.

Washington, however, can still leverage Baghdad’s need to sustain its ties with the US, as was witnessed during US Envoy Tom Barrack’s June 15 visit to Iraq where he pressed new Iraqi premier Ali al-Zaidi to act against Iran-linked armed groups.

By June 28, during Iranian Foreign Minister Araghchi’s Iraq visit, Baghdad conducted unprecedented simultaneous midnight raids on at least 47 senior politicians and leaders, several of whom have close ties to Tehran and the PMF.

While Iran has been successful in keeping its relationships with Iraqi militias out of the US-Iran MoU and enjoys a positive relationship with Baghdad, such developments point to America’s ability to independently affect changes in sectors featuring Iranian gains, outside of the MoU’s framework.

Similarly, in Lebanon, while Iran’s need to ensure Israeli adherence to the ceasefire remains, the June 26 Framework agreement ties Israeli withdrawal to Hezbollah’s disarmament — which the group continues to categorically reject, in light of Israel’s continued occupation of South Lebanon. The Lebanese government’s assent to the deal despite its lack of effective enforcement abilities leaves Lebanon in a volatile predicament where recurring Israeli strikes could further reduce trust in US-Iran technical talks, as has already occurred before.

What to make of the recurring strikes

The recurring strikes are driving up the distrust between Tehran and Washington in the 60-day post-MoU period, even though both appear committed to negotiating a final deal.

Gulf states themselves have already begun adapting to the new regional order.

Qatar, for instance, announced on June 18 that it was operationalising (and enhancing) a 2022 agreement that seeks to link Iran’s South Pars and Qatar’s North Field gas reservoirs. This can give Iran a transmission capacity of up to 1,000 megawatts from Qatar’s electrical grid.

And Saudi Arabia is reportedly preparing to host a “Gulf-Iran reconciliation summit”. This will expand the space for Iran’s reintegration with Gulf economies.

Oman, Qatar and Saudi Arabia — unlike Bahrain, Kuwait and UAE — are looking to contain the Iranian threat through engagement and reconciliation, a path reinforced by what is widely agreed to be a strategic defeat for the US and Israel in the war.

Naturally, these three states’ widening engagement with Iran has affected their ties with the US.

On June 30, for instance, a Wall Street Journal report indicated a sharp downturn in US-Saudi ties over Riyadh’s refusal to support Washington’s failed military effort in early May to re-open the Strait of Hormuz.

Iran feels that the US will respond to its increased regional heft by repeatedly attempting to undermine its gains. This, in turn, would be something that Tehran would necessarily have to counter. This dynamic could trigger both intermittent military skirmishes before a final deal is reached, as well as a return to full-scale war.

Hence, the period after the MoU and before the deal can very much witness more rounds of limited strikes, hostile rhetoric, mutually destructive threats and seemingly categorical assertions related to the long-term US-Iran relationship. In effect, however, they are likely to be focused principally on weakening the short-term negotiating position of the other side.

The author is a Senior Research Associate at the Council for Strategic and Defense Research, New Delhi