The administration of U.S. President Donald Trump has told international mediators it has no interest in returning to the June memorandum of understanding with Iran, the Wall Street Journal reported on Thursday. The decision leaves diplomats without a framework to restart negotiations on reopening the Strait of Hormuz and jolted markets: Brent crude rose above $88 a barrel while major stock indexes fell.
The memorandum, signed at the Palace of Versailles in talks that involved Vice President JD Vance, called for reopening the strait and launching negotiations on Iran's nuclear program in exchange for sanctions relief and Tehran's access to assets frozen abroad. The deal began to unravel within weeks, after Iran started attacking ships to assert control over the waterway. The 60-day deadline expired on August 17 without an agreement, and Trump refused to extend it, saying he was "not in a hurry," according to Brazilian outlet ND Mais.
For Brazil, the practical effect runs through oil prices. Roughly 20 percent of the world's traded oil and gas passes through the Strait of Hormuz, and a higher Brent benchmark tends to push up diesel, which Brazil imports in significant volumes, with knock-on effects on freight costs and inflation. As a crude exporter, Brazil earns more when the barrel rises, but pays more for the refined products it buys overseas. The equation keeps both the central bank and the government watching a conflict that is already feeding into food prices.
The interests at stake
Iran's position is equally rigid. The spokesman for the Islamic Revolutionary Guard Corps, Brigadier General Hossein Mohebbi, told state television the strait can reopen if Washington returns to the memorandum, but on Tehran's terms. Iranian conservatives read Paragraph 5 of the June deal as codifying Iran's authority to set conditions on shipping, an interpretation Washington has never publicly endorsed.
"If the United States stops obstructing and returns to the memorandum of understanding, we can open the Strait of Hormuz within the framework of the agreement reached. Our conditions must be accepted by the United States," Mohebbi said.
The week saw intensive shuttle diplomacy with little to show for it. Pakistan's army chief, Asim Munir, traveled to Tehran and left with scant progress, the Wall Street Journal reported. Oman's foreign minister tried to finalize a transit-lane agreement meant as a stepping stone toward broader reopening talks, but the effort stalled after Iran demanded changes that would give it greater control over traffic; Tehran announced an understanding that Muscat never confirmed. Qatar's prime minister, Sheikh Mohammed bin Abdulrahman al-Thani, also met Iran's foreign minister, and the joint statement announced no breakthrough. Oman is the historic back channel between Washington and Tehran, the route through which the 2015 nuclear talks began. Even so, ND Mais reported that Trump went as far as threatening to strike the sultanate if it "interfered" in the strait efforts.
Sanctions and a half-blocked strait
On the economic front, the U.S. Treasury launched Operation Economic Outcast on August 25, sanctioning nearly 60 entities and expanding secondary sanctions to five sectors: digital assets, technology, gold, aviation and shipping. Treasury Secretary Scott Bessent described the package as an "economic onslaught against Iran's financial connections around the globe." Brazilian magazine VEJA, which dubbed the initiative an "economic D-Day," counts nearly 70 companies under embargo and notes that China, the largest buyer of Iranian oil, has warned it may retaliate against the United States.
At sea, the situation is one of limbo. Traffic through the strait rose to 10 commodity vessels on Wednesday from 8 on Tuesday, still well below the ten-day average of about 15 ships, according to Kpler data cited by Reuters. A tanker was hit by an unidentified projectile on Thursday, the United Kingdom Maritime Trade Operations agency said. According to ND Mais, the U.S. naval blockade, reimposed after the ceasefire collapsed, has already redirected 44 commercial vessels. The war reaches its six-month mark this Friday, and Umer Karim, a researcher at the University of Birmingham, summed up the moment to Reuters: "The old MOU is essentially dead in all aspects. The task of the mediators has become even more difficult in the current circumstances."