“Iran has never won a war and never lost a negotiation,” tweeted Donald Trump in 2020. He had just ordered the assassination of Qasem Soleimani, head of Iran’s Al Quds.

Now it seems like Trump has forgotten his aphorism. Six years later, Iran has survived the recent war with America and holds the whip hand over talks. In reality, nothing substantive has been discussed between US and Iranian negotiators since Trump unveiled his 14-point MoU last month in the Palace of Versailles. Dubbed by others “the memorandum of misunderstanding”, the piece of paper is a list of inducements for Iran to reopen the Strait of Hormuz.

None of the points were binding. Iran did not agree to give up control of the waterway. It simply pledged a resumption of prewar traffic and a return to nuclear talks. In exchange, it would eventually get hundreds of billions of dollars via unfrozen assets, lifted sanctions and future investments. This was not a deal. To paraphrase Tacitus, Trump baked a dessert for Iran and called it a memorandum. The problem is that Iran has all the initiative. 

Now, apparently, we are back to square one. Earlier this week, Iran attacked three tankers in Omani waters — one Qatari, two Saudi — and Trump responded with air strikes on Iran. In turn, Iran said it attacked 85 US military targets in the region. Detailed damage assessments were not available aside from the continued harm to Trump’s credibility. Three weeks ago, Trump said he was dealing with “strong, smart people” in Iran who were not radicals and were ready to hold good faith talks. One hugely attended ayatollah’s funeral and several ceasefire violations later, Trump now describes Iran’s leaders as “scum”, “sick”, and “vicious, violent people”. Talk about mood swings. He added. “They want to take out the US leader — me. I’m on every single one of their [assassination] lists.” In place of his promised golden age of US-Iran economic co-operation, Trump is threatening once more to bomb Iran’s bridges and desalination plants. How exactly should we interpret his wildly bipolar invective? 

The Iranians are having little trouble doing that. They also dole it out themselves. “Either we hold on to the straits, or every one of us becomes martyrs to it,” Iran’s speaker, Mohammad Bagher Ghalibaf, said on state TV this week. But having vowed Armageddon on many occasions in the last four and a half months, Trump’s threats are subject to the laws of diminishing returns.  Each time he vows hellfire, his bluster sounds a bit more hollow. Short of resuming a US naval blockade, which would squeeze Iran’s economy but push up global oil prices again, he has few credible sticks left to shake. To a country that has been so intensively bombed, the spectre of more bouncing rubble is not concentrating Iranian minds. Indeed, at his press conference at the end of the Nato summit in Ankara, Trump seemed to have half-talked himself out of his earlier threats. Negotiators could continue to talk if they wanted, he said resignedly. He doubted they would get anywhere. 

If not war, then what? The likely answer is a long spell of unsatisfactory stop-go talks, occasional skirmishes and Iran periodically yanking Trump’s chain to remind him who controls events. In the medium term, Iran will lose much of its leverage as oil shippers build pipelines and find alternative routes to Hormuz. That will take months, however, if not years.

In the meantime, Trump is stuck in a cul-de-sac of his own making. He showed his frustration in Ankara this week by berating Nato allies for providing no help during Operation Epic Fury. He also resumed his bromides about Greenland, which is the diplomatic equivalent of kicking the dog. But even that routine is losing its edge. As time passes, Trump’s European counterparts plus Canada’s Mark Carney are finding ways to navigate Trump’s bluster. They are in the early stages of creating what Carney calls a “dense web of connections” to lessen their dependency on the US. Trump’s counterparts nodded politely to him in Turkey and agreed that Iran should not have a nuclear weapon. But their serious discussions are with each other nowadays. 

I am turning this week to my colleague Andrew England, our Middle East editor, who is in Dubai at the moment. Andrew, you’re far closer to the action than me and there has been a second night of US strikes. Am I underestimating the potential for a resumption of full-scale war?

Recommended reading

• My column this week looked at Trump’s ill-fated call to Fifa’s Gianni Infantino. “Call it the anti-Midas touch,” I write. “Trump loves gold, Yet so much of what he handles, from reflecting pools to alliances, turns into something else.”

• I urge Swampians to read this Big Read on “The price of Palantir’s politics” by my colleagues Joe Miller, George Hammond and Chris Cook. The company leadership’s increasingly political bet on Maga is backfiring abroad, threatens to backfire at home in a post-Trump America and is alienating senior employees, they found. Excellent reporting. 

• You should also read my colleague, Pilita Clarke, on “The Great AI cover up”. The archipelago of data centres that AI titans are opening is consuming vast amounts of energy and threatens to reverse the gains America has made in reducing fossil fuels. Naturally they don’t want to disclose any of this. 

• Finally, do also read Boston University’s Jonathan Kirshner’s essay in Foreign Affairs on what Thucydides really thought about power. His writing on the Peloponnesian War is being wildly misrepresented via the quoting of “decontextualised snippets” — particularly on the strong doing what they can and the weak suffering what they must. Thucydides’ real warning was about the hubris of power, Kirshner convincingly argues.

Andrew England replies

Thanks Ed. If the past two and a half years have taught those of us working in the Middle East anything, it’s the folly of trying to make predictions. Since Hamas’s October 7 2023 attack on Israel triggered waves of regional conflict, traditional red lines have been crossed, and historical precedents have ceased to be reliable guides to the future.

Then you have the most unpredictable, mercurial US president sitting in the White House, and a hardline regime in Iran, battered but far from beaten, that believes it has the upper hand in the conflict and is determined not to submit to military pressure.

But it’s definitely a perilous moment. While we are not yet back to full-scale war, this week’s escalating clashes are the severest test of a shaky ceasefire agreed on April 8.  

Iran has so far this week targeted military bases in Bahrain, Jordan and Kuwait. It has not yet escalated to the level of the ferocious barrages of missiles and drones it launched across the Gulf in the first months of the war, targeting energy facilities, airports and other infrastructure. The US, meanwhile, has launched scores of air strikes on the Islamic republic and struck Iranian civilian infrastructure for the first time in months.

There have been previous flare-ups since the ceasefire was reached in April that were contained as diplomatic efforts to end the war continued through back channels. That signalled that both sides, despite deep distrust and decades of hostility, wanted a deal. Mediators are working to keep the diplomatic push on track.

But the tit-for-tat strikes this week are the most intense since the foes signed a memorandum of understanding on June 17 to extend the truce by 60 days and reopen the Strait of Hormuz. 

The danger is that the warring parties end up in an escalatory cycle that spirals out of control. As you know, there are hawks in the US, and Israel, that are highly critical of the MoU and will be urging Trump to return to war. 

The hope is that Trump has learnt from his reckless decision to join Israel in launching the war in February and realises that a return to conflict would heap more damage on the global economy, while doing little to change the calculus in Tehran.

The Iranian regime has endured two wars in a year, showed no signs of fracturing and proven its capacity to inflict pain on the global economy and its Gulf neighbours in what it deems an existential battle. None beyond the hawks believe it will surrender to US pressure.

But it also needs a deal if it is to access the tens of billions of dollars the US is dangling as an incentive to agree to a settlement to end the war, which it needs to begin the arduous task of reviving its beleaguered economy and repair the war damage.

For all the criticism of the MoU, it does offer an off-ramp for both. It’s not a final deal, rather it was essentially a means to extend the April ceasefire and reopen the strait to ease the global energy crisis, while setting the parameters for discussions on a final settlement, including an agreement on Iran’s nuclear programme. It is only then that Tehran would secure the significant sanctions relief it desires. 

The problem is that there are massive challenges to get anywhere close to that point. It took about two months to broker the one-page MoU before complex negotiations on the nuclear file could begin. And the clashes over the Strait of Hormuz — Iran’s key source of leverage — underline how precarious the diplomatic track is. 

As you suggest, there may not be a return to full-scale war. But the risk is we end up with no political settlement and a dirty ceasefire under which traffic through the strait remains throttled, with the continuation of a simmering conflict and tit-for-tat strikes. It’s a huge mess, rife with uncertainty.