After the MoU: A long road toward a final deal

This exclusive report is available to Geopolitical Desk Intelligence subscribers. Below is a summary of the report, along with a download link to the full article, which expands on our findings regarding the risks and the future of the U.S.-Iran MoU. If you have any questions, or would like to speak with one of our analysts, please contact us.

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After months of muscle diplomacy, the U.S. and Iran signed a 14-point MoU formally ending hostilities and supposedly lifting maritime traffic restrictions in the Gulf. This interim deal has significantly diminished low-intensity clashes in the Gulf and signals a return to stability for global markets.

It also has the recipe to be truly transformational, not only for Iran but its relations with Washington, turning the Iran war into a blessing in disguise after decades of misalignment and failed diplomacy. Yet the odds for a final deal remain low, and for its successful implementation over the medium term even lower.

The building blocks that the MoU seeks to lay are yet to be consolidated, with Lebanon's ceasefire being frail, the Strait of Hormuz facing continued traffic restrictions, and immediate economic relief for Iran needing a few more steps to fall into place before being achieved.

Should these issues be fixed in an orderly manner, the MoU leaves an extendable 60 days for technical teams to resolve the complex issues of limiting Iran's nuclear programme and lifting multi-layered U.S. sanctions. The MoU is ultimately a thinly defined roadmap that will face several roadblocks, bringing renewed but manageable uncertainty to global markets.

The chief risks are:

• Israeli presence in Lebanon and overall spoiling
• U.S. backtracking on sanctions relief and nuclear talks, driven by domestic politics
• IRGC desire to prove continued leverage, notably in the Strait of Hormuz

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