Iran stated that prevailing conditions make a return to the memorandum of understanding with the United States impossible, citing violations of the agreement as the core obstacle.

Iran's position on the MOU

Iran's position centres on the assertion that agreement violations by the US have created conditions incompatible with resuming the memorandum of understanding. The statement signals a hardened diplomatic stance, with Iran placing responsibility for the breakdown on the other party's failure to honour prior commitments.

Diplomatic context

The reference to agreement violations underscores the depth of the dispute between the two sides. Iran's framing of the situation as one where "current conditions" are prohibitive suggests that any path toward re-engagement would require addressing those violations as a prerequisite. No specific timeline or conditions for resolution were indicated in the statement.

US Treasury Secretary Scott Bessent warned that Iran's economy could collapse "within weeks or months" as Washington intensifies its sanctions campaign against Tehran.

Bessent told reporters at the Group of 20 finance ministers’ meeting in Asheville, North Carolina, that the Trump administration aims to force the Iranian regime to "come to their senses" rather than trigger a total economic implosion.

Sanctions Push Iran Deeper Into Crisis

The comments build on Operation Economic Outcast, launched on August 24 to sever Iran’s financial, oil, shipping, and trade links. Bessent stated that the Treasury expects new secondary sanctions roughly every week, beginning with banks. He previously warned that Washington is prepared to use "financial violence if we have to."

Iran is already under severe pressure. President Masoud Pezeshkian reported that foreign trade had fallen 35% due to sanctions and a US naval blockade. Annual inflation reached 66%. The Treasury also proposed cutting Banque Misr’s UAE branches off from US correspondent banking after alleging the operation processed suspected billions of dollars for Tehran over 2.5 years.

China’s Iranian Oil Trade Faces Scrutiny

The campaign places significant focus on China. According to 2025 data from analytics firm Kpler, China accounted for more than 80% of Iran’s shipped oil. This makes Beijing central to Tehran’s remaining export revenues.

Bessent said "all options are on the table" regarding sanctions tied to those purchases, rejecting claims that Washington is reluctant to confront China.

Oil Risks Complicate G20 Push

The tougher line carries global risks. Renewed US-Iran strikes pushed Brent crude above $90 a barrel on Monday. Traffic through the Strait of Hormuz remains severely disrupted. The waterway handled about one-fifth of global oil trade before the conflict.

Bessent used the G20 gathering to rally partners behind the sanctions push, noting that the European Union had offered "fulsome support," even as US tariffs and the Iran war strain relations with allies.

What the Numbers Show

The data reveals a critical dependency: with foreign trade down 35% and inflation at 66%, Iran’s economic stability relies heavily on its oil exports. Since China accounts for more than 80% of shipped oil, any successful enforcement of secondary sanctions on Beijing would directly target the vast majority of Tehran's remaining hard currency inflows, accelerating the predicted economic collapse.