A Lawyer Looks at the MoU

Daniel Pomerantz is an Israeli lawyer who takes a look at the MoU and breaks it down for us section by section. He raises some issues — such as the economic effect of the agreement on China — that I have not seen discussed anywhere else. More of Pomerantz’s analysis can be found here: “A Lawyer Breaks Down the Iran Deal, Section by Section,” by Daniel Pomerantz, Algemeiner, June 18, 2026:

…The bad news:

In addition to the last 60 days of ceasefire, Iran has just bought itself at least 60 more, and the US appears to have a very low appetite for further military action. This buys time for the regime to recover from the damage it took in March and April, and to put off making any true, long-term concessions. As the old saying goes, “Iran has never won a war and has never lost a negotiation.”

Iran will be immediately flooded with cash. A RealityCheck financial analysis revealed that Iran’s oil revenues alone would be sufficient to cover its entire national budget, including military. This would enable Iran to rebuild its war machine, its nuclear program, domestic oppression, and even terror proxies.

Israel’s freedom of action against Iran, Hezbollah, and possibly even Hamas might be dangerously limited, but the MOU is ambiguous and the real-world impact is not at all clear.

Iran has demonstrated a frightening ability to protect its terror proxies and to drive a wedge between the United States and its closest allies — even at Iran’s weakest moments.

Iran has arguably scored a significant victory: facing down the most powerful military in human history while remaining in power, and demonstrating a significant American vulnerability: to economics, naval chokepoints, and domestic elections.

The world is watching, and America’s enemies will learn from this. It is not clear why President Trump abandoned US efforts to escort ships through the Strait of Hormuz in May, which would have neutralized Iran’s strongest leverage, but that was, in our opinion, the key turning point.

But there’s also good news:

Global oil markets will be flooded as never before — not only will the Strait of Hormuz open, along with its backlog of tankers, but the UAE has left OPEC, Venezuela and America have increased oil production, and even Iranian oil will join global markets.

Venezuela, with the world’s largest oil reserves, after the U.S. seizure of Nicolás Maduro, has had all American sanctions on its oil sales lifted, and American companies are now helping the Venezuelans to repair those wells that had fallen into desuetude. Oil production is at an eight-year high, and continues to rise.

The UAE has quit OPEC, because it no longer wanted to have Saudi Arabia, the linchpin of OPEC, limiting its output. The UAE is now producing about 3.5 mpd, but expects by the beginning of 2027 to produce more than 5 mpd.

The experience of having the Strait of Hormuz closed will no doubt lead the deep-pocketed Arab oil states to immediately start to build oil pipelines from the Gulf, across Saudi Arabia, most likely to the Red Sea, where tankers can take the oil either out onto the Arabian Sea to Asian markets, or up through the Red Sea to the Suez Canal and thence to European markets. A second route for a pipeline would run from Saudi Arabia through Jordan to Israel, where tankers at Haifa could then take the oil to European markets. Once these pipelines are ready, the Gulf oil will bypass the Strait of Hormuz, and Iran will lose its only economic weapon.

Iranian ballistic missiles and drones have hit all eight members of the Gulf Cooperation Council, with considerable damage to airports, oil facilities, hotels, and other clearly civilian targets. Determined not to be attacked in that way again, all of these states will be spending heavily on defense. Some of those countries will want to buy defensive weapons from Israel, as the UAE has already done. Iran’s attacks in the region could end up enriching Israel’s defense industry, a nice case of unintended consequences.

Overall, Iran has set in motion two major developments, both bad for it in the long run. The first is the determination of the Gulf Arab states to build a trans-Arabian pipeline, or pipelines, so that oil from the Gulf no longer need be transported by ship through the Strait of Hormuz. There might even be a pipeline taking oil from the Gulf through Jordan and Iraq to a port in Israel, to then be loaded on tankers transporting the oil to European markets. Whatever the route or routes for those oil pipelines, the threat of Iran again closing down the Strait of Hormuz will have little effect.

Second, Gulf Arab states will want to build up their arsenal of defensive weapons against an aggressive and triumphant Iran, and several of them will follow the lead of the UAE and buy weapons from Israel that have proven their worth, especially the Iron Dome anti-missile system.

The threat from an Iranian hegemon, and America’s unwillingness to engage militarily with Tehran, will inevitably push the Gulf Arab states into an informal — and unstated — alliance with Iran’s only military rival in the region, the state of Israel.

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