The Paper That Reopens the Sea: Why the Hormuz Deal Is an MoU, Not a Peace

On Sunday, the President of the United States announced, on his own account before any document was signed, that the war with Iran was over, that "oil will flow" through the Strait of Hormuz, and that the naval blockade his own navy had thrown across Iran's ports since April would be lifted. By Monday, the markets had answered: Brent crude, which had climbed above $113 at the war's March peak, fell back toward the mid-eighties, the war premium bleeding out of the price of every barrel the world burns. The International Maritime Organisation welcomed the news as a step toward restoring the freedom of navigation and evacuating the thousands of seafarers stranded in the Gulf. Pakistan announced it would host the signing in Geneva on Friday. After more than three months of war, the guns, it seems, are quiet. 

I wish to offer a word of caution regarding the prevailing sense of relief. While the cessation of hostilities is undoubtedly positive, the document responsible for this outcome is considerably weaker than coverage suggests. As a mariner, I observe several reasons within the arrangement's details to believe that the strait may be declared open long before it is open in practice, and that this peace may represent a temporary pause rather than a lasting settlement. My analysis proceeds through three primary lenses: the legal foundation and language of the agreement; the operational realities at sea that determine whether intentions are realised; and the broader geopolitical context, particularly the influence of external actors and the implications of this episode. I will address these in sequence: first, the nature of the document; second, the practical realities at sea; third, the external spoiler; and finally, my assessment of the broader significance.

A memorandum is not a treaty

Let us begin with a term frequently cited yet rarely scrutinised: a Memorandum of Understanding (MoU), not a treaty or a convention. This distinction is fundamental to the durability of the current peace and warrants careful examination. The difference between an MoU and a treaty is as significant as the difference between a handshake and a contract. 

A treaty, in the proper sense, is a formal international agreement governed by the law of treaties, codified in the Vienna Convention on the Law of Treaties of 1969. It is, in principle, binding; it creates obligations in international law; it is, conventionally, registered with the United Nations under Article 102 of the Charter; and a party that breaches it is in breach of international law, with whatever consequences that carries. A treaty is the strongest instrument two states can make short of merging their sovereignty.

A Memorandum of Understanding serves a different function. In standard diplomatic practice, it is a statement of intent, a record of what parties claim they intend to do, and is typically crafted to avoid legal binding force. Governments employ MoUs when they seek the appearance of agreement without the constraints of obligation, signalling direction while retaining flexibility. An MoU may be honoured or disregarded at will, and its abandonment, unlike the breach of a treaty, incurs no clear legal penalty, as it was never designed to be binding. It is, in effect, a promise written in pencil.

I should enter one refinement here, because it strengthens rather than weakens the point. Under the law of treaties, what ultimately decides whether an instrument binds is not the word stamped at its head but whether the parties intended to create obligations and framed their language accordingly; some documents called memoranda have been held binding, and some grand-sounding accords are merely political. That is precisely why this arrangement matters as it does: it has been cast as a memorandum, and will almost certainly be worded as one, exactly so as to avoid the binding intention a treaty carries. The label and the language point in the same direction, away from obligation.

This should temper any celebration of recent developments. Even treaties, which are stronger instruments, can be abandoned. States have denounced, withdrawn from, and abrogated treaties; the history of arms control is replete with examples of binding agreements that were later disregarded. The United States, for instance, withdrew from the Iran nuclear deal, the JCPOA, in 2018, despite its endorsement by a unanimous Security Council resolution. If such a treaty can be set aside, the reliability of a memorandum signed in Geneva is even more questionable. Its significance remains minimal until its language is disclosed and its implementation is observed.

This leads to an often-overlooked aspect: the document remains unpublished, and its precise wording is unknown. The strength of any legal instrument is determined not by its title but by its operative verbs. In legal terms, there is a significant difference between "shall" and "may," "will" and "is liable to," "undertakes to" and "intends to," or "guarantees" and "will use its best endeavours." A statement that Iran "shall reopen the strait within thirty days" constitutes an obligation, whereas "intends to facilitate the resumption of navigation as conditions permit" is merely aspirational, with an inherent escape clause built into the phrase "as conditions permit." Until the memorandum's operative language is revealed, it is impossible to determine whether it imposes any binding commitments on Tehran or simply records its stated intentions.

I encourage readers, once the text is available, to focus on the operative verbs rather than the introductory declarations. Pay attention to conditional language, terms such as "subject to," "contingent upon," and "provided that," which may suspend obligations based on other parties' actions. Identify the actor in each clause and assess whether the language imposes a commitment or merely expresses an aspiration. The distinction between a strait that reopens and one merely intended to reopen is embedded in this grammar, which remains undisclosed. Until the foundational document is available for scrutiny, any peace achieved is accepted on trust.

A further complication is the emergence of conflicting versions of the agreement's terms. The American account asserts that Iran will dismantle its nuclear programme and remove enriched uranium, with financial incentives for compliance. In contrast, the Iranian version, disseminated through state media, claims a withdrawal of American forces, a reconstruction package reportedly as high as three hundred billion dollars, and, notably, the reopening of Hormuz "under arrangements set by Tehran." Other reports cite varying figures for unfrozen Iranian assets, twenty-five billion dollars in some accounts, half that in others. Both narratives originate from parties with vested interests: the American version is tailored for domestic and diplomatic leverage, while the Iranian account seeks to maximise perceived gains. Third-party reporting has provided little independent clarity, often reflecting the perspective of the source capital. When the parties to a memorandum cannot agree on fundamental terms, such as financial transfers or the conditions for reopening the strait, it is reasonable to question the substance of the agreement. The phrase "under arrangements set by Tehran" is particularly significant and warrants close attention, as it may prove central to the entire arrangement.

A treaty no one wants to name

I wish to present an observation I have considered for several months, now brought into sharper focus by recent events. The arrangement emerging at Hormuz is, in practice if not in name, a managed strait. The choice to formalise it as a memorandum rather than a treaty reflects the parties' inability to openly acknowledge its true nature.

Each party faces a distinct predicament. Iran seeks to assert control over the passage of oil through the strait, transforming it from an open waterway into one subject to its authority, potentially enabling future regulation or charges. However, openly claiming such control would violate established principles of the law of the sea, specifically the right of transit passage, and could provoke renewed intervention. The United States aims to reopen the strait and claim success, but cannot acknowledge any terms other than the freedom of the seas, a foundational principle for its navy and global influence. The Gulf states desire the resumption of oil exports and an end to conflict, yet cannot be seen as accepting Iranian administration of the Strait of Hormuz. Consequently, all parties benefit from a document that achieves substantive change while maintaining plausible deniability, a managed passage presented as a free one, allowing Iran some control while enabling Washington to deny any concession. The MoU serves this purpose precisely because its ambiguity permits each party to interpret it as needed and to deny what cannot be publicly admitted.

This is what I mean by a treaty no one wants to name. The machinery of a managed strait was already assembling itself during the war. Tehran stood up what it called a Persian Gulf Strait Authority, with apparatus for inspecting vessels at Larak Island, for granting approved passage, and for making quiet exceptions for favoured buyers. Ranks of dark, waiting tankers anchored off Qeshm and Larak while Iran decided who might pass. That is not a free strait; it is an administered one, a toll booth in all but the word "toll." And the danger of this week's peace is not that it dismantles that machinery, but that it legitimises it under the cover of a reopening. If the strait reopens "under arrangements set by Tehran," then the arrangements, not the freedom, are the substance, and the memorandum becomes the founding charter of a managed waterway, signed by parties who will each swear it is no such thing.

I have previously referred to this as a "soft Montreux," after the 1936 convention that granted Turkey recognised authority over the Bosphorus and Dardanelles while maintaining merchant ship passage. A direct parallel cannot be imposed on Hormuz, the legal and geographic contexts differ, and trading nations would not accept explicit tolls. But a functionally similar managed chokepoint, operating under negotiated terms and framed as safety and service provisions, is entirely feasible, and a memorandum is the ideal instrument for constructing such an arrangement without explicit acknowledgement. The absence of a binding treaty is not a flaw but a strategic feature: an instrument too vague to enforce is also too vague to condemn.

The strait is open. Will the ships sail?

Turning from legal considerations to maritime realities, this is where my professional experience is most relevant and where the disparity between formal agreements and practical outcomes is greatest. Even if the memorandum is signed with robust language and Iran removes all administrative barriers, declaring Hormuz open and toll-free, a critical question remains: which vessels will actually transit the strait, and which insurers will provide coverage for them?

For a strait is not reopened by official declaration alone, but by the collective decisions of thousands of shipowners, charterers, masters, and especially underwriters, all of whom must assess whether the passage is sufficiently safe to risk vessels, cargo, and crew. The conclusion of hostilities does not immediately eliminate the associated dangers. During the conflict, credible concerns arose that the strait had been mined, and naval mines are inexpensive, indiscriminate, and can remain undetected for extended periods. A mine sown in a single night can take a month to clear. Critically, it is not merely the presence of mines but the credible suspicion of them that deters passage. No captain will risk a laden tanker in waters he believes may be mined, and no underwriter will provide the war-risk coverage that makes the voyage possible, and without that coverage, the voyage does not happen, whatever the memorandum says. Thus, a strait may be legally open yet commercially closed, and this disconnect can persist for months. 

This is why the IMO, in welcoming the deal, was careful to add that the evacuation of stranded seafarers will require time to ensure that all necessary safety and security guarantees are in place, and why France and Britain are reported to be readying a joint mission to assist in reopening the strait, which in plain language means mine-clearance and the slow, dangerous work of certifying the water safe. The declaration of peace is the work of an afternoon; the restoration of confidence is the work of a season. Until the underwriters are satisfied, until the war-risk premium falls from its wartime heights back toward something a trade can bear, the strait will reopen slowly, tentatively, ship by nervous ship, and the grand announcement will run well ahead of the grey reality of tankers actually sailing.

There is a further, subtler problem, one that goes directly to the question of whether this is truly a free strait or a managed one, and it lies in the geography of the passage itself. The normal shipping lanes through Hormuz, the internationally recognised traffic separation scheme, run through the southern side of the strait, in Omani waters, precisely so that the world's tankers pass through a channel governed by the rules of transit passage and beyond any single coastal state's grip. But during the war, Iran redrew the scheme, pulling approved traffic northward, away from the Omani lanes and into the narrow channel between the islands of Qeshm and Larak, hard against its own coast. Analysts took to calling it the Tehran toll booth, and the name is apt.

The Qeshm-Larak channel is a narrow waterway, at points only five nautical miles wide, dotted with islands and adjacent to Revolutionary Guard naval bases. Large tankers cannot traverse such a passage as they would in the open sea; these congested and hazardous waters call for pilots, tug assistance, and vessel traffic management, the services typically provided and charged for by ports or coastal states. If transit is directed through this channel, Iran can plausibly claim it is not imposing an unlawful toll, but rather charging for legitimate services such as pilotage, tugs, and safety management. The distinction between an unlawful toll and a lawful service fee is a nuanced and contested issue in maritime law, and it is through this mechanism that free passage can be quietly converted into a priced one. Thus, the strait may be officially open and toll-free, and yet every vessel passing through it would still pay Iran for safe passage through the route Iran had chosen to designate. No toll, and yet a payment for passage; free navigation, and yet navigation that must be bought. This is the soft Montreux that made concrete, not in the memorandum's text, which will, of course, affirm the freedom of navigation, but in the channel's physical characteristics and the ordinary practices of marine safety. The control is hidden in the route, not the legal language.

When reports state that the strait is open, it is essential to ask the mariner's questions, not the diplomat's. Is the war-risk premium decreasing? Are underwriters providing coverage? Have the mines been cleared and certified? Which channel are ships being routed down, and what fees are being charged along it? The answers to these questions, rather than the formal signing in Geneva, will determine whether Hormuz is genuinely open or only nominally so.

The spoiler outside the room

There is one more reason to hold the celebration, and he has a name. Even as the deal was announced, Israel's National Security Minister, Itamar Ben-Gvir, declared on social media that the agreement does not bind his country in any way. "Trump's agreement does not bind us," he wrote. "Israel is not subordinate to the United States. We are an independent and sovereign country. We are not partners to this agreement, which does not safeguard our security." He went further, insisting that Israel must not withdraw from territory its forces have taken in Lebanon, must not settle for anything less than the dismantling of Hezbollah, and must not stay its hand in the face of any fire directed at it.

It is important to clarify the context of these statements. Ben-Gvir is a far-right minister whose views do not necessarily represent the official position of the Israeli government, and his primary objection concerns the Lebanon dimension of the agreement, specifically the questions of Hezbollah and the territory held by Israeli forces, rather than the Hormuz arrangement itself. The broader Israeli government has adopted a more cautious stance. Nevertheless, the significance of his remarks lies not in his rank but in the message conveyed: a principal belligerent in the conflict considers itself unbound by the memorandum and reserves the right to act independently, including continuing operations that could reignite the broader conflict the memorandum seeks to resolve.

It is worth outlining the scenarios that could unfold if Israel does act independently. In one, Israel launches new strikes against Hezbollah or Iranian targets, provoking a direct Iranian response; this could escalate rapidly, drawing the United States back into the conflict, reversing the de-escalation and the reopening of the strait, and sending oil prices sharply upward. In a second, limited Israeli action triggers only a localised response, with both Iran and the United States exercising restraint, but the resulting instability undermines confidence in shipping and keeps the war-risk premium elevated for months. In a third, Israeli action targets only Lebanon, yet spillover draws Iranian proxies, or even Iranian naval forces, into confrontation, again risking a return to open hostilities in the Gulf. Each scenario would test the memorandum's fragility, and each underscores that the peace achieved here rests on the continued restraint of a player that is not a party to the deal.

This situation reveals the fundamental weakness of the arrangement and returns us to the legal principles with which we began. A memorandum between the United States and Iran cannot bind Israel, as Israel is not a signatory; even treaties bind only their parties. A peace that relies on Israel refraining from action against Hezbollah or Iran is therefore inherently fragile, especially when Israel has explicitly stated it does not feel constrained. Should Israel initiate hostilities in Lebanon, prompting an Iranian response and subsequent American involvement, the memorandum would become a dead letter overnight, and the strait that was opening would close again, with oil premiums rising accordingly. The Geneva signing does not eliminate this risk; it merely conceals it, and the paper is thin.

What the paper hides, and what it reveals

In summary, I offer the following interpretation of this week's events, informed by an analysis of structural dynamics rather than privileged information.

This is not a genuine peace, but a temporary pause, maintained not by the binding force of a treaty, for there is none, but by the mutual calculation that renewed conflict would be more costly. Underlying that calculation is a balance of weapons the memorandum neither addresses nor resolves. Iran retains the ability to threaten the strait, to seed the fear of mines, to redirect maritime traffic, and to threaten, as it did during the conflict, the desalination plants on which the entire Gulf depends for its drinking water, a catastrophe I have elsewhere called scorched water, which no force can answer because force is what triggers it. The United States retains its blockade, lifted but not dismantled, reimposable on thirty days' notice, and behind it the slow strangulation of an Iranian economy short of money, water, and food. Each side holds a weapon it dares not fire, because firing would destroy them both, and the quiet of the Gulf is the quiet of two duellists, each with a pistol at the other's head and neither able to fire. That is not the peace of reconciliation. It is the peace of mutual deterrence, and a peace of that kind lasts exactly as long as every party keeps calculating that the gun is better held than fired.

The memorandum, then, is not the foundation of peace but its costume. It cloaks a balance of deterrence in the language of agreement, intentionally avoiding any explicit acknowledgement of the underlying realities. The choice of a memorandum over a treaty, and the rhetoric of freedom over the machinery of control, reflect the same thing: the parties' inability to articulate aloud the true nature of what they have built.

And yet this thin paper reveals, more starkly than any argument, the true locus of control. The strait was closed by an American blockade and reopened by an American authorisation; the price of the world's oil rose and fell on the turning of that key; and the power that could close and open the Gulf at will was not Iran, and was not China, whose vast navy was conspicuous throughout by its absence, and was not the Gulf states, but Washington. Whatever else this memorandum is, it is a receipt, a record of who controls the system, written in the one currency that cannot lie, the price of a barrel of oil.

For India, watching from the far side of the Arabian Sea, the lesson is the one I have urged before and urge again now with fresh force. A nation that imports the great bulk of its oil up this strait, and cannot carry it in its own ships, insure it through its own houses, or protect it with its own escorts, is a nation whose lifeline runs through a channel that others open and close, price and manage, by paper or by force. The remedy is not to seize the gate, which India cannot and should not, but to build the means to pass it on its own terms, and to take a seat at the table where the real rules, the ones hidden in the verbs and the channels and the service fees, are quietly written. Yet India is not alone in its exposure. China, the world's largest oil importer, will note the precedent set here, weighing what it means for both its maritime investments and its dependence on energy routes exposed to distant decisions. Japan, South Korea, and the European Union, each deeply reliant on Gulf oil and gas, will reassess their vulnerabilities and reconsider contingency planning, joint naval arrangements, and supply diversification. The Gulf states themselves, often voiceless in the drafting, now face the prospect of their exports passing through a strait whose terms are quietly flexible and whose openness is never entirely assured. The lesson for all is the same: the rules of access are being renegotiated, not in open forums but in quiet, ambiguous documents, and a failure to shape those rules is a decision to be governed by them. The freedom of the seas, which we were all raised to believe was a law of nature, is being converted before our eyes into a service that must be bought, and the conversion is happening not in the daylight of a treaty registered at the United Nations but in the shadow of a memorandum that few will read closely and that everyone will misname.

The guns are quiet. The strait is opening. The price is falling. And the danger has not passed; it has only changed its shape, from the loud danger of war to the quiet danger of a managed peace, held by weapons no one dares fire and founded on a paper too soft to bind and too vague to condemn. Watch the verbs when the text appears. Watch the war-risk premium. Watch the channel down which the tankers are routed, and who charges them for the passage. And watch the man in Jerusalem with the match in his hand. The peace of June is real, and it is welcome, and it may not outlast the year. A memorandum, after all, is only a promise written in pencil, and pencil, as every mariner knows, is what you use on a chart precisely because it can be rubbed out.