Will a US-Iran deal unlock $300bn in investment fund for Tehran?

Iran’s economy has been crippled due to years of sanctions imposed on the country by the United States and other nations following the Islamic revolution in 1979, and then amplified over Iran’s nuclear and ballistic missiles programmes. These measures have restricted Tehran’s ability to access its own assets, such as revenues from oil sales, which have been frozen in foreign banks.

Tehran was granted sanctions relief in the wake of the landmark 2015 nuclear deal signed under President Barack Obama, but Trump tore it up in 2018 during his first term. The 2015 deal had put limits on Iran’s nuclear enrichment in exchange for sanctions relief.

Iran’s state-affiliated Mehr News agency reported on Sunday that the 14-point draft memorandum of understanding provided for the release of $24bn in frozen Iranian assets.

Pressed by CBS News on the possibility of releasing frozen funds, Vance said the $24bn figure “just doesn’t appear anywhere in any of the texts that we’ve talked about with the Iranians”.

“What we have said is that we’re willing to talk about unfreezing assets, but a much, much bigger deal is unsanctioning their economy – so long as they make the long-term commitments on the nuclear programme,” the vice president added.

For Iran, where the war inflicted an estimated $29bn damage and the population is struggling with the highest inflation rate since 1942, the investment fund may constitute a much-needed lifeline.

But the optics will not be as favourable, raising a “dignity problem”, Seloom said. “Tehran reads this as supervised, conditional money rather than sovereign relief,” the analyst told Al Jazeera.

Which other contentious issues will be discussed after signing the deal on Friday?

One of the US’s main declared objectives has been to assuage concerns surrounding Iran’s nuclear programme, including a stockpile of more than 440kg (970lbs) of enriched uranium.

The memorandum extends an existing ceasefire arrangement for another 60 days, during which the two sides are expected to hold further negotiations on issues including the disposal of the enriched uranium.

Vance said Tehran had agreed to surrender its stockpile, undergo regular inspections and refrain from producing or buying nuclear weapons, but the full text of the memorandum of understanding has yet to be disclosed.

The reopening of the Strait of Hormuz, which has been subject to competing blockades by the US and Iran, has also been a point of contention. Trump suggested an agreement to reopen the waterway had been reached when he announced a deal on Sunday with the words: “Let the oil flow!”

Speaking to CNBC, however, Vance acknowledged that not all sticking points surrounding the passageway had been resolved. “Well, our expectation is that the strait is gonna be opened in a toll-free way for the long term, and that’s the sort of thing that we’re gonna figure out in these technical negotiations,” he said.

Israel’s ongoing aggression on Lebanon is also expected to create friction, as Iran has insisted any ceasefire deal must include the allied nation. Israel has so far rejected any arrangement that would limit its ability to strike what it says are Hezbollah targets. Defence Minister Israel Katz on Friday said the military would continue operating in Lebanon regardless of any agreement with Tehran.

Mixed reactions to the agreement

Iranian ⁠⁠Foreign ⁠⁠Minister Abbas Araghchi said the memorandum of understanding would reap economic benefits for Iran but stressed that Tehran would not rely on those benefits for all of its needs.

“We have a history of broken promises, non-compliance, and the tearing up of agreements,” Araghchi said on Monday, according to Press TV. He said discussions about the lifting of US sanctions and Iran’s nuclear programme would be held during a 60-day period of negotiations following the official signature on Friday.

Iran’s new supreme leader, Mojtaba Khamenei, has yet to comment. Some Iranian observers objected to the timing of the announcement, which coincided with Trump’s birthday. Referring to the assassination of former Supreme Leader Ayatollah Ali Khamenei at the beginning of the US-Iran war, conservative journalist Parisa Nasr wrote on X: “Was giving a birthday gift to the killer of the martyred Leader also one of the unwritten conditions of the deal?”

Iranian President Masoud Pezeshkian said Iran’s Supreme National Security Council had approved the deal so that “America’s genuine commitment to respecting the rights of the Iranian nation could be tested in practice.”

Speaking at the G7 summit in France on Tuesday, Trump described the deal with Iran as “fair”, “good”, and under which Iran “can’t have a nuclear weapon” or “they get blown up.”

Qatar’s Emir Sheikh Tamim bin Hamad Al Thani, who is also attending the summit, said the Iran-US agreement will result in positive outcomes for the region.

“This is a very important deal, there’s still a lot of work to be done, but with this momentum – if we continue like that, Mr President – I think we can achieve and do great things in the region,” Sheikh Tamim said.

US Democratic lawmakers welcomed a deal to halt the war with Iran but stressed that its terms must be made public. Senator Gregory Meeks said “any final agreement must be durable, enforceable, transparent” and more than “vague announcements or political spin”.

US Republican Senator Lindsey Graham on Sunday said he was “pleased” about the deal but also “somewhat concerned that Iran’s view of the agreement seems different than what the American negotiating team is claiming”.

Seloom, at the Middle East Council on Global Affairs, said the different narratives underlined that the two sides were “not really talking to each other”. “They’re talking past each other, to domestic audiences,” he said. “Each side has to sell this as a victory it cannot sell honestly.”