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The MOU stipulates that the Strait of Hormuz will reopen, with Iran agreeing to allow “safe passage of commercial vessels with no charge for 60 days only,” followed by negotiations with Oman to “define the future administration” of the vital trade route, through which some 20% of the world’s oil passed before the war.

Under the agreement, the U.S. will “terminate all types of sanctions,” will “make fully available for use the frozen or restricted funds and assets,” and will begin the removal of its naval blockade of Iran’s ports.

Iran also “reaffirms that it shall not procure or develop nuclear weapons,” with a mechanism to be “mutually agreed” upon relating to its “enriched material” stockpile.

The senior U.S. official said that Iran’s commitment to the destruction of its enriched stockpile is “a major, major win for the United States of America,” adding that sanctions relief will be tied to the nuclear settlement and “to the extent” that Iran fulfills its obligations.

One point in the memorandum that could draw criticism is a commitment for the U.S. to work with regional partners to develop a plan for at least $300 billion to be distributed to Iran for “reconstruction and economic development.” The draft memorandum notes that the mechanism for the distribution of these funds will be hammered out during the 60-day negotiation period.

The senior U.S. official downplayed this point and noted that the U.S. is not required to contribute to the fund.

“What it says is that if we get to a final deal and if the Iranians behave, we will permit the sanctions relief that would allow, for example, the Emiratis to build a power plant in Iran. That’s all it says,” the senior official said. “If they do what they have to do, we will permit the investment in the reconstruction of their country.”