Inside Iran-US deal to end the war

The United States has proposed a massive $300 billion reconstruction and economic development package for Iran as part of a sweeping peace framework designed to end hostilities, reopen the Strait of Hormuz and pave the way for a comprehensive agreement on Tehran’s nuclear programme.

The commitment was contained in the officially released text of the Islamabad Memorandum of Understanding between the United States of America and the Islamic Republic of Iran, making it one of the largest economic components of any US-Iran agreement to date, according to Reuters.

Under the 14-point memorandum, which was first published by CNN, the United States and its regional partners would develop a “definitive, mutually agreed plan” worth at least $300 billion for the reconstruction and economic development of Iran.

The mechanism for implementing the package is expected to be negotiated over a 60-day period, culminating in a final agreement.

The US/Israel-Iran war lasted for roughly four months, during which both sides and their regional allies suffered heavy losses in lives, infrastructure, and economic stability. PREMIUM TIMES reports that the United States and its partners faced significant military expenditures, personnel casualties, and disruptions to global energy and shipping routes, while Iran and its allies endured thousands of deaths, displacement of millions of people, severe infrastructure damage, loss of trade revenues—especially from oil—and widespread economic strain from sanctions and blockades.

Against this backdrop of mutual losses and regional destabilisation, the proposed $300 billion reconstruction package is presented as a recovery mechanism to rebuild Iran’s damaged economy and stabilise the wider region after the conflict. However, the memorandum leaves unanswered questions about how the proposed $300 billion package would be financed, implemented and maintained, issues that negotiators are expected to address during the 60-day talks.

The proposal emerged as the United States published the full text of the memorandum on Wednesday, after criticism that details of the agreement had not been made public.

A senior US administration official described the framework as a phased arrangement linking Iranian compliance on security and nuclear issues to increasing economic relief.

“This is fundamentally an agreement that allows us to open the Strait of Hormuz immediately, commit the Iranians to destroying the nuclear stockpile, and then gives us a dial where if the Iranians dial up their good behaviour, we respond by dialling up the kind of economic and sanctions relief that can make them a more prosperous country,” the official said.

The memorandum is expected to be formally signed on Friday, triggering negotiations to reach a comprehensive deal within 60 days.

While the agreement contains provisions covering military de-escalation, maritime security and nuclear oversight, the proposed reconstruction package stands out as its most significant economic component.

According to the text, Washington would work with regional partners to mobilise at least $300 billion for Iran’s development, while also granting the licenses, waivers and permissions required to facilitate related financial transactions.

The proposal comes alongside broader commitments by the United States to ease economic pressure on Iran.

The memorandum states that Washington intends to negotiate the termination of all sanctions imposed on Iran, including unilateral US sanctions and other international restrictions, according to a mutually agreed schedule.

In the interim, the US Treasury Department would issue waivers allowing the export of Iranian crude oil, petroleum products and derivatives, as well as related banking, insurance and transportation services.

“The United States of America undertakes that immediately upon the signing of this MOU and until the termination of sanctions, US Department of Treasury will issue waivers for the export of Iranian crude oil, petroleum products and derivatives, and all associated services, including banking transactions, insurances, transportation,” the 10th point of the text reads.

The United States also pledged to make Iran’s frozen or restricted assets available, with both sides expected to negotiate the procedures governing their release.

The economic package is closely tied to provisions aimed at restoring commercial shipping through the Strait of Hormuz, a critical artery for global energy supplies.

The memorandum requires the United States to begin lifting its naval blockade immediately after signing and to fully remove it within 30 days.

Iran, in turn, would facilitate the safe passage of commercial vessels through the Persian Gulf and the Sea of Oman free of charge for 60 days, while undertaking demining and other maritime safety measures.

Analysts say the reopening of the strategic waterway could help stabilise global energy markets and restore investor confidence if successfully implemented.

In exchange for economic incentives and sanctions relief, the text reveals that Iran reaffirmed that it would not seek to develop nuclear weapons.

The document outlines plans for future negotiations on the disposition of Iran’s stockpile of enriched uranium. It specifies that the minimum methodology would involve down-blending the material on Iranian soil under the supervision of the International Atomic Energy Agency (IAEA).

The agreement also commits both sides to discuss enrichment activities and Iran’s civilian nuclear requirements as part of a final settlement.

Iran has not issued any official statement since the memorandum text was made public.

Until a comprehensive deal is reached, Iran would maintain the current status of its nuclear program, while the United States would refrain from imposing new sanctions or deploying additional forces in the region, according to the text.