Iran-US Talks: Hormuz Rules and Frozen Funds in Focus
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Iran-US Talks: Hormuz Rules and Frozen Funds in Focus

By Editorial TeamJul 3, 2026 · 12:25 PM6 min read
Editorial Team
Editorial Team

Iran signaled on Monday that no technical-level Iran-US talks would be held in Qatar this week, casting doubt on President Donald Trump’s assertion that the two sides would meet in Doha on Tuesday, as both countries weigh a return to diplomacy after reciprocal strikes late last week.

The messaging underscores how fragile the current US-Iran understanding remains after attacks around the Strait of Hormuz, a critical global energy shipping route. Any renewed engagement is expected to focus on implementing the June 17 memorandum of understanding (MoU), including rules for maritime passage and steps tied to Iran gaining access to funds frozen abroad under US sanctions. For related context on Tehran’s posture, see Iran’s Plan to Strike Back Against the U.S..

Key developments

  • Iran’s Deputy Foreign Minister Kazem Gharibabadi rejected the premise that technical talks with the US would take place in Qatar this week, saying consultations would instead continue with Qatari officials.

  • Mehdi Fazaeli, a member of Iran’s supreme leader’s office, said planned talks with the US for Sunday were cancelled by Iranian negotiators due to fundamental disagreements over the Strait of Hormuz and other issues.

  • The US and Iran exchanged strikes late last week after a container ship and a tanker using a US-backed evacuation route for stranded vessels were attacked on Thursday; Washington blamed Iran, then bombed infrastructure and installations on Iran’s southern islands, and Iran later attacked US bases in Bahrain and Kuwait.

  • Both sides accused each other of violating commitments under the June 17 MoU, including Article 5, which says Iran will “make arrangements using its best efforts for the safe passage of commercial vessels with no charge for 60 days only from the Persian Gulf to the Sea of Oman and vice versa”.

  • Iran’s Foreign Minister Abbas Araghchi said on Sunday that other countries should not “interfere” in managing the Strait of Hormuz and Iran’s arrangements to reopen it, adding it would take at least a month to restore the strait’s capacity to pre-war levels.

Context and background

The strikes late last week were the first by either side since Iran and the US signed the MoU on June 17, an agreement intended to halt military operations and set out commitments related to maritime passage and other issues.

Fighting that began in late February in what the source described as a US-Israeli war on Iran has disrupted operations around the Strait of Hormuz. Iran has treated the waterway as a key leverage point and has insisted it will not be bypassed in any arrangement for reopening or managing transit.

US Vice President JD Vance has floated the idea of a military hotline between the two countries, but it has not appeared to prevent confrontations in the strait, and Iran’s Islamic Revolutionary Guard Corps (IRGC) has indicated it is not interested in such a channel.

Details and evidence

Strait of Hormuz: passage terms and disputes over fees

The MoU includes a 60-day provision that commercial vessels will be able to transit without charge between the Persian Gulf and the Sea of Oman. Iranian authorities have also said they plan to extract fees for insurance, environmental and other services, a position that has been rejected by Washington and others, while the MoU stipulates no tolls during the 60-day duration.

Frozen funds and licensing

Iran has sought access to funds frozen abroad for years under US sanctions. Trump and other US officials have said any access would come later and be tied to Iran’s performance in enforcing commitments.

Iranian officials have said they want to avoid arrangements in which money is nominally released but remains effectively inaccessible. President Masoud Pezeshkian said Iran expects at least $6bn held by Qatar to be released.

Under the MoU, Iran’s funds are to be “fully available for use” once the agreement is implemented, with release procedures to be mutually agreed in negotiations. The text also specifies that the funds must be usable whether they remain in the original account or are transferred, and must be payable to any ultimate beneficiary designated by Iran’s Central Bank, while the US is to issue necessary licences and authorisations.

Trump said Iran would use released funds to buy corn and other humanitarian goods such as food and medicine. Iran’s central bank chief Abdolnasser Hemmati said Iran may buy agricultural products from the US if the quality and price are agreeable, but said the MoU does not obligate Iran to do so.

Lebanon and the scope of the MoU

Iran has also identified broader goals for negotiations, including US recognition of Iranian sovereignty and non-interference, a US military pullback from Iran’s periphery, a halt to new sanctions or regional force build-up during the MoU period, a reconstruction or economic development package, and formal monitoring and dispute-resolution mechanisms.

Lebanon has remained a focus because the MoU’s first point called for an immediate and permanent halt of military operations on “all fronts”, including Lebanon, where Hezbollah has fought Israel for years. For more on the Lebanon track, see Israel-Hezbollah Ceasefire Agreement Takes Effect in Lebanon.

According to the source material, a US-brokered agreement with the Lebanese government signed on Friday does not require Israeli forces to leave southern Lebanon or halt all attacks. Hezbollah criticised the deal, while Lebanese government officials endorsed it, describing a path toward Hezbollah being disarmed and replaced in southern Lebanon by the Lebanese army.

Nuclear issues and internal pressure in Tehran

The source material said Iran’s missile programme will not be negotiated under the MoU. It also reported that some hardline voices in Tehran argue that Iran’s nuclear programme should no longer be discussed with foreign powers.

More than 60 members, described as nearly three-quarters, of Iran’s Assembly of Experts signed a statement saying negotiators must not cross Supreme Leader Mojtaba Khamenei’s perceived red lines, including demands for no talks on Iran’s nuclear rights, revenge for assassinated leaders, the closure of the Strait of Hormuz, war compensation and the removal of sanctions.

Iranian authorities have previously expressed willingness to make nuclear concessions, including diluting highly enriched uranium now buried under rubble at bombed facilities, but have said this would only happen under a clear step-by-step timetable guaranteeing Iran receives economic benefits from sanctions being lifted.

Current status and next steps

As of Monday, Iran publicly disputed that technical talks with the US would take place in Doha this week, while maintaining that consultations would continue with Qatari officials. Trump has said talks would occur in Doha on Tuesday, but no mutually confirmed schedule was cited in the source material.

Any next round of engagement, if it materialises, is expected to prioritize implementation disputes tied to the Strait of Hormuz and mechanisms for releasing Iran’s frozen funds under the June 17 MoU, amid continuing disagreements over regional files including Lebanon and over whether, and under what guarantees, nuclear issues could be addressed.

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