US opens door to Iranian oil in historic sanctions rollback

The proposal points to one of the more striking ironies of the emerging US-Iran agreement: using Iranian assets to buy American products from a country the Islamic Republic has long cast as the "Great Satan" and a threat to the revolution.

Speaking in Switzerland on Monday, US Vice President JD Vance said Washington could agree to unfreeze Iranian assets for purchases of American products such as soybeans, corn and wheat.

"If Iranian assets are ever unfrozen, they're going to go to make American farmers richer and to feed the Iranian people," Vance said, adding that the United States and Qatar would oversee the process.

The proposal marks one of the clearest signs yet that the Trump administration may be shifting from its longstanding "maximum pressure" approach toward a strategy centered on incentives and compliance.

It has also revived questions about whether limited economic engagement could eventually evolve into something that once seemed unimaginable: renewed trade between Iran and the United States.

Vance said the proposal was developed by Jared Kushner, President Donald Trump's son-in-law and one of the lead US negotiators, together with Qatari officials.

Close allies turn sworn adversaries

Before the 1979 revolution, Iran was one of Washington's closest allies in the Middle East and an important market for American goods and services.

"There was no embargo, no sanctions and no limitation," said Mohamad Machine-Chian, economist and journalist at Iran International. "Iranian industrial infrastructure is American to begin with," Machine-Chian said.

The revolution transformed that relationship. The hostage crisis, sanctions and decades of political hostility largely froze direct commerce between the two countries.

At the same time, the Islamic Republic built much of its identity around opposition to the United States. Iranian leaders frequently portrayed American economic and cultural influence as a threat to the revolution, while late Supreme Leader Ali Khamenei repeatedly warned against what he described as Western "cultural aggression."

A market that never disappeared

Yet American products never entirely disappeared from Iran.

Machine-Chian said some US goods continued reaching the country through intermediaries, often passing through several countries and layers of traders before reaching Iranian consumers.

The arrangement was costly and inefficient, but demand remained. And it led to a contradiction that persists today. While many Iranians continued to seek out American products, the country’s rulers repeatedly warned against them.

The Islamic Republic has long viewed unrestricted American economic and cultural influence with suspicion, arguing that it could undermine the values the revolution sought to promote. Khamenei often described such influence as a form of "cultural aggression."

"There is a great deal of potential between Iran and the US," Machine-Chian said. "Iran remains the last untapped developing market in the world … Iranian people love American products and would love a good deal to be able to buy and sell, trade with America."

Still, he cautioned against assuming the latest proposal signals a broader economic opening.

"The result will be decided by compliance, the negotiations and the political aspect of it all," he said. "I wouldn't hold my breath."

Will American goods reach ordinary Iranians?

Supporters of the proposal argue that using frozen assets to purchase food and agricultural products could help ease economic pressure on ordinary Iranians without handing Tehran unrestricted cash.

Mahdi Ghodsi, Economist and Leader of the International Economics Group at the Vienna Institute for International Economic Studies (wiiw) and Senior Fellow at the Centre for Middle East and Global Order (CMEG), said the arrangement could help stabilize prices and reduce pressure on Iran's currency reserves.

"It means there is a lower pressure on currency reserves," Ghodsi said. "There could be some stabilization in the currency market of Iran."

He argued that preventing further economic deterioration is important not only for Iran's economy but for ordinary households already struggling with soaring costs.

But Ghodsi also warned about oversight.

"The regime is corrupt. The regime is a kleptocracy," he said. "We cannot be sure that they don't benefit from such behavior to fill their pockets."

Critics, however, argue that the success of any such arrangement would depend on how strictly it is monitored.

Max Meizlish, a sanctions expert at the Foundation for Defense of Democracies and former US Treasury official, warned that humanitarian trade does not automatically guarantee humanitarian outcomes.

He said Washington would need safeguards to ensure goods purchased with frozen Iranian assets actually reach ordinary people and are not diverted through networks linked to the Islamic Revolutionary Guard Corps.

"The question is whether they might be providing an indirect form of support to the IRGC," Meizlish said.

Without a transparent mechanism, he warned, American goods intended for civilians could end up strengthening the very actors Washington says it wants to constrain.

Meizlish also questioned the administration's broader shift in approach.

Just days before the latest proposal, US officials were still describing Iranian oil revenues as a major source of funding for Tehran's armed forces, regional partners and proxies.

"Iran's oil and petroleum exports are a primary source of revenue for its armed forces, terrorist partners and proxies," the State Department wrote in a report sent to Congress on June 16.

For critics, the contrast is striking: a government that only days ago warned that Iranian revenues fund armed groups is now considering a framework that could unlock billions of dollars in Iranian assets under a US-approved arrangement.

Whether the proposal becomes a meaningful opening or remains a narrowly defined humanitarian mechanism remains unclear. Whatever its economic impact, however, the symbolism is difficult to miss.

A state founded on opposition to the United States may soon use billions of dollars in frozen assets to purchase American goods, while a US administration once committed to maximum pressure is increasingly betting on incentives instead.

A joint statement issued by mediators Qatar and Pakistan after nearly 18 hours of talks said the parties had agreed to establish a High Level Committee to oversee negotiations, launch technical working groups and begin work toward a final deal.

But one of the most notable provisions was the creation of a deconfliction cell involving the United States, Iran and Lebanon, facilitated by the two mediators, to ensure adherence to the cessation of military operations in Lebanon under the memorandum of understanding signed last week.

The prominence of the Lebanon mechanism in both the joint statement and subsequent comments by Iranian officials underscored how central the issue had become to the talks.

Vice President JD Vance met Iranian officials on Sunday at the Swiss resort of Buergenstock in the first round of negotiations aimed at implementing the memorandum between Tehran and Washington.

The talks quickly ran into difficulties.

Iranian media reported that Tehran refused to return to four-way talks after a break, citing public threats from President Donald Trump and arguing that substantive negotiations could not proceed while fighting continued in Lebanon.

US officials disputed that account.

"The Iranians never left and are still here meeting and negotiating deep into the night," a US diplomat involved in the talks said, adding that discussions covered Lebanon, the Strait of Hormuz, nuclear issues and implementation of the memorandum.

Iran argues that Washington has failed to uphold its commitment to help secure a halt to hostilities in Lebanon and has repeatedly linked progress in negotiations to developments on the Lebanese front.

The issue resurfaced throughout the talks and appears to have become one of the central subjects of mediation by Qatar and Pakistan.

Foreign Minister Abbas Araghchi highlighted the new Lebanon mechanism after the talks concluded, calling it the "first real test" of the understandings reached in Switzerland.

According to the joint statement, chief negotiators will report regularly to the High Level Committee and lead working groups focused on nuclear issues, sanctions, and a monitoring and dispute-resolution mechanism designed to ensure implementation of the memorandum.

The committee has also approved a roadmap toward reaching a final agreement within 60 days and authorized the immediate start of further technical negotiations.

In addition, the parties agreed to establish a communication channel aimed at preventing incidents and misunderstandings and ensuring the safe passage of commercial vessels through the Strait of Hormuz.

Despite public disagreements and repeated threats from Trump that the United States could resume military action if Iran failed to restrain its regional allies, both sides emerged from the talks with new negotiating structures and a timetable for future discussions.

For now, however, the success of the diplomatic process may depend less on nuclear issues than on whether the newly created Lebanon deconfliction mechanism can prevent another flare-up from derailing negotiations altogether.

The controversy highlights tensions within Iran's political establishment over whether the rallies represent a source of national unity or an increasingly disruptive force in debates over diplomacy and relations with the United States.

The backlash was triggered by a document published by the presidential Strategic Affairs Office (SAO) following a conference titled "The Street Movement for Protecting Iran: Nature, Opportunities and Ways to Enhance It."

The report examined the nightly gatherings that have spread across Iranian cities since the war and argued that their continued presence could complicate decision-making and undermine diplomatic efforts.

Many of the nightly gatherings—known in Iran's political discourse simply as "the street"—began as public mourning ceremonies for Khamenei before evolving into organized political events.

It warned that the "continuation of gatherings would constitute a serious obstacle to adopting strategic and expedient decisions at sensitive moments." Left unchecked, the report said, the gatherings could "lead to obstruction in the path of diplomacy."

The report drew an immediate backlash from hardline media and politicians.

The website Jahan News criticized what it described as the report's "inappropriate and offensive" language, particularly its characterization of the gatherings as "emotional" rituals.

"This terminology is used despite the fact that the Supreme Leader repeatedly praised the nightly gatherings and even explicitly stated that people's chants in public squares influence the course of negotiations."

Initially encouraged by senior officials as demonstrations of national solidarity during wartime, the rallies attracted large crowds. Witnesses say attendance has since declined as the rhetoric has become more radical, with many gatherings now drawing between 100 and 200 participants.

Ali Khezriyan, a member of parliament's National Security and Foreign Policy Committee, criticized the Strategic Affairs Office for portraying the gatherings as an obstacle to diplomacy.

"While we speak about the role of the people, the SAO has described the people's gatherings as causing obstruction in diplomacy, whereas the Supreme Leader considers the people to be overseers," he told IRGC-linked Fars News.

"These same people brought themselves and their loved ones into the streets under enemy bombardment," he added.

The SAO report appeared to recommend gradually winding down the gatherings after the first ten days of Muharram or following the funeral of former Supreme Leader Ali Khamenei, scheduled for July 4-5.

Hardline political groups have increasingly used the events as platforms for speeches and mobilization. Speakers have addressed contentious issues including ceasefire terms and negotiations with the United States.

Some have targeted prominent political figures, particularly Parliament Speaker Mohammad Bagher Ghalibaf, who heads Iran's negotiating team, with crowds encouraged to chant slogans against him.

Fars News Agency, which is linked to the Revolutionary Guards (IRGC), published a photograph of a participant holding a banner that read: "Instead of deciding how to empty the streets, the government should think about the emptying of people's dinner tables."

One commenter wrote: "We did not gather on the orders of officials so that we would leave the streets based on their decisions."

Another wrote: "Why do you think you have the right to talk about these gatherings? People did not come into the streets with your permission for you to disperse them. Keep your mouth shut before we open ours."

Paragraph 2 of the MOU effectively enshrines the abandonment of the Iranian people by committing both sides to "refrain from interfering in each other's internal affairs."

This clause stands in direct contrast to many of President Trump's previous statements regarding the Iranian people and his repeated condemnations of the regime's brutality.

In 2017, Trump described Iranians as "a proud people" forced to submit to extremist rule. In 2018, he tweeted: "Such respect for the people of Iran as they try to take back their corrupt government. You will see great support from the United States at the appropriate time!"

Following the June 2025 strikes on Iranian nuclear facilities, he posted: "If the current Iranian Regime is unable to MAKE IRAN GREAT AGAIN, why wouldn't there be a Regime change? MIGA."

In January 2026, he urged Iranians to continue protesting and "take over your institutions," adding that "help is on its way." The following month, during major opposition demonstrations, he again appealed directly to Iranians: "When we are finished, take over your government. It will be yours to take."

Today, however, the MOU represents a dramatic reversal of those positions. The agreement abandons a population Trump repeatedly encouraged to reclaim its country and signals that the United States is no longer willing to support internal pressure against the regime.

The contrast is particularly striking because it comes after a period in which Iran was arguably more vulnerable than at any point in decades.

Following military setbacks, economic pressure and growing domestic dissatisfaction, the regime faced mounting challenges both externally and internally. Yet rather than using that leverage to pursue broader political change, Washington appears to have chosen accommodation.

Trump now speaks of Iran's leaders as "very smart" and "strong," describing them as pragmatic negotiating partners. According to PBS NewsHour, a US official said Iran would be rewarded for "acting like a normal country."

That raises a fundamental question: after 47 years of repression, terrorism, hostage-taking, regional destabilization and the deaths of many Americans linked to Iran and its proxy network, is Tehran now being offered normalization without accountability?

The agreement appears poised to provide sanctions relief, access to frozen assets and expanded oil sales. Much of that oil is likely to flow to China. Additional revenue could strengthen the IRGC, reinforce domestic repression and increase support for armed allies such as Hezbollah and Hamas.

Supporters of the agreement argue that diplomacy is preferable to conflict and that negotiated limits are better than perpetual confrontation. Yet history suggests that agreements with the Islamic Republic are only as effective as the enforcement mechanisms behind them and the willingness to use them.

If substantial benefits are delivered before key obligations are fully verified, leverage disappears while risks increase.

This concern is not new. When President Obama declined to support Iran's Green Movement following the disputed 2009 election, many critics viewed the decision as both a betrayal of democratic values and a missed strategic opportunity to weaken the regime from within.

The current debate echoes many of the same arguments. But what Trump has done may prove even more consequential.

After authorizing actions that significantly degraded Iran's nuclear infrastructure, ballistic missile capabilities and military assets, he achieved what many previous administrations were unwilling or unable to attempt.

Yet by rapidly transitioning from maximum pressure to accommodation, he risks transforming a major tactical victory into a strategic mistake.

At the moment Iran appeared most vulnerable and many Iranians seemed most willing to challenge the regime, the United States chose not to prioritize support for opposition movements or increase pressure on the IRGC from within.

Whether such efforts would have succeeded is unknowable, but abandoning them entirely removed a source of leverage that would have, at the very least, strengthened America's negotiating position.

A different strategy would have required a sustained effort to explain to the American people why supporting the aspirations of ordinary Iranians serves both value-based American principles and long-term US security interests.

Genuine stability in the Middle East is unlikely to emerge solely from agreements with authoritarian rulers. Lasting stability comes when governments enjoy legitimacy among their own populations, especially populations that are likely to be among the most pro-American in the Muslim world.

Instead, the administration chose strategic impatience. In doing so, it not only disheartened many Iranians who hoped for greater international support, but also created uncertainty among Gulf allies and Israel.

Several regional and foreign-policy experts argue that Persian Gulf states may now reassess the reliability of American security guarantees and adapt accordingly.

The art of diplomacy is not surrendering hard-won leverage before a final agreement is fully negotiated and enforceable.

A 60-day ceasefire could easily become months of inconclusive negotiations while Iran replenishes its finances, strengthens the IRGC, suppresses domestic dissent and supports regional proxies.

But one thing is already clear: the agreement's most overlooked consequence is not what it says about centrifuges, missiles or sanctions. It is what it says about the people of Iran and American assurances.

For years, American leaders, including President Trump, spoke of supporting Iranians seeking freedom from Islamist authoritarian rule. The MOU signals a different set of priorities.

By pledging noninterference in Iran's internal affairs while offering the regime a pathway toward normalization and economic relief, Washington appears to have chosen engagement with Tehran over support for political change.

Whether that choice ultimately produces peace or merely postpones a larger confrontation remains to be seen. But for millions of Iranians who believed the United States stood with them against their oppressors, the message of this agreement is unmistakable: they are now largely on their own.

Mahmoud Nabavian, a member of parliament’s National Security and Foreign Policy Committee, said Supreme Leader Mojtaba Khamenei had repeatedly objected to the course of negotiations with the United States and set conditions that were not reflected in the Iran-US memorandum of understanding.

His remarks came as Iran’s negotiating team travelled to Switzerland for a new round of technical talks with the United States, days after Tehran and Washington signed the MoU aimed at ending the war and opening the way for further negotiations.

“The Supreme Leader explicitly expresses his dissatisfaction,” Nabavian said on the program. “He says, ‘Why did you not observe the conditions?’”

He said Khamenei had written that Iran was “neither in a hurry nor under any compulsion to negotiate or reach an agreement,” adding that the talks should be aimed at “ending the war and securing compensation,” not the nuclear issue.

According to Nabavian, Khamenei had also told negotiators not to discuss what he called “the main issue," apparently referring to Tehran's nuclear program.

“I will read one sentence. There is no other choice,” Nabavian said, before quoting from what he described as Khamenei’s correspondence: “What has taken shape in the Pakistan negotiations is fundamentally different from what was supposed to happen and from what constituted the condition for the legitimacy of the negotiations.”

Nabavian said Khamenei then called for the negotiations to be stopped.

He also said Khamenei repeated his position on the nuclear file on April 4, April 18 and April 24, insisting that Iran should either achieve “victory” by forcing the other side to fully recognize its right to enrichment, or remove the nuclear issue from the agenda of negotiations “forever.”

On the Strait of Hormuz, Nabavian said Khamenei viewed the waterway as a key point of leverage against Washington.

“The Strait of Hormuz is a very important key,” Nabavian quoted him as saying. “If the Americans want pressure taken off their throat, they must first implement preconditions, foremost among them the payment of compensation and debts.”

Nabavian added that “none of these things” had appeared in the MoU.

He said Khamenei had insisted that management of the Strait of Hormuz must remain exclusively in Iran’s hands, “not even with Oman, let alone other countries.”

According to Nabavian, Khamenei had also divided ships into different categories, saying some vessels should be stopped altogether, some could pass after paying tolls, and others, including ships belonging to Iran’s allies, could pass without payment.

He said the instructions were included in a message dated March 12.

As Nabavian continued speaking, he was interrupted by the state TV's presenter and the program abruptly ended.

State TV vows legal action

Iran’s state broadcaster later called his remarks a legal violation warranting judicial action, saying his references to classified documents and correspondence by senior officials were punishable.

It also said one director at the organization had resigned over the incident and that disciplinary action would be taken.

The disclosure also drew criticism from conservative media circles. The editor-in-chief of Mashregh accused Nabavian of selectively reading from a wider set of correspondence.

“Why don’t you say these selective excerpts of yours were from about 20-something correspondences, and in fact from the earliest ones?” Hossein Soleimani wrote on X, addressing Nabavian. “Since you disclosed and published the system’s secret and top-secret documents, you should at least have disclosed them correctly and accurately.”

Nabavian and other figures close to the hardline Paydari Front have sharply criticized the Iran-US MoU in recent days, accusing President Masoud Pezeshkian, Parliament Speaker Mohammad Bagher Ghalibaf and Foreign Minister Abbas Araghchi of making dangerous concessions to Washington.

The criticisms come as a message attributed to Khamenei said he authorized the signing of the memorandum of understanding despite having “another view in principle,” after receiving assurances from Pezeshkian that Iran’s rights and those of the “Resistance Front” would be protected.

Iranian media have reported that the negotiating team, led by Ghalibaf and including Araghchi, Central Bank Governor Abdolnaser Hemmati and other senior officials, has left for Switzerland for technical talks with the United States.

The talks are being held as the Islamic Revolutionary Guard Corps (IRGC) Navy has once again closed the Strait of Hormuz over what Tehran describes as violations of the MoU in Lebanon.

On Saturday, Iran’s Supreme National Security Council, in a directive seen by Iran International, instructed media outlets not to portray the renewed closure of the Strait of Hormuz and Iran’s simultaneous participation in talks as a split between the “field” and diplomacy.

The directive said Iran was pursuing a single strategy combining military pressure and diplomacy, and urged media outlets to frame action in Hormuz not as an alternative to negotiations but as support for them.