Schiff and Reich criticize $100 billion cost of Iran deal

Economists Peter Schiff and Robert Reich criticized the agreement between Washington and Tehran to reopen the Strait of Hormuz, citing the high financial cost and loss of life. The deal, which involves a ceasefire and the reopening of the waterway for 60 days, was described as a return to the status quo achieved at a significant expense.

Cost and Consequences

Peter Schiff, co-founder of Echelon Wealth Partners, stated in a post on X that the arrangement is a "deal to work on a deal." He noted that while the situation reverts to the pre-war state, "lives have been lost, oil is far more expensive, and about $100B has been spent."

Robert Reich echoed these sentiments, labeling the agreement a "terrible failure." He pointed out that the Memorandum of Understanding restores the situation to where it was before February 28, the date the war began. Reich highlighted that nuclear issues remain unresolved and must be negotiated over the next two months.

Human and Economic Toll

Reich provided further details on the impact of the conflict, stating that the war resulted in the deaths of 120 Iranian school children and 13 American troops. He also noted that oil prices had surged and food prices increased due to a fertilizer shortage caused by the closure of the Strait of Hormuz.

Metric	Impact
Estimated Cost	$100 billion
American Troops Killed	13
Iranian School Children Killed	120

Reich criticized the revocation of the 2015 Iran nuclear deal, arguing that Iran is now under the control of a more extremist regime than when the war started. Both economists concluded that the deal does not represent a victory given the incurred costs and lack of resolution on key issues.

Iran and the United States have finalized the text of a Memorandum of Understanding (MOU) scheduled for signing on June 19, mandating the immediate end of the maritime blockade and a cessation of all military operations. Iran's Foreign Minister Araqchi has announced that new U.S.-Iran talks are set to begin this Friday in Switzerland, marking the first round of negotiations following the MOU signing. Donald Trump confirmed that ships carrying oil are moving safely from the Strait of Hormuz along a secure route, also highlighting other safe travel areas. Under the terms of the 14-article draft, Iran has agreed to neither produce nor acquire nuclear weapons, while the US has committed to lifting its naval blockade and releasing $24 billion in blocked Iranian funds.

The agreement stipulates that the Strait of Hormuz will reopen within 30 days, with Iran reportedly allowing ships to pass through the route for free during the first 60 days. However, revised wording suggests Iran and Oman reserve the right to determine the future administration of maritime services in the strait, potentially allowing for toll collection later — a prospect the US has previously opposed.

Key Terms of the Agreement

The draft MOU outlines a 60-day period of technical negotiations to achieve full sanctions relief, including the suspension of sanctions on Iranian oil and petrochemical sales. A primary challenge for the US will be enforcing Iran's nuclear commitments, with the deal intended to be endorsed by a UN Security Council resolution. Notably, Iran's missile program and support for resistance groups are excluded from the final negotiations. While the US views the deal as a critical step toward preventing nuclear proliferation, significant mistrust remains between the parties.

Parameter	Details
Document Structure	14-Article Draft MOU
MOU Signing Date	June 19
Duration of Nuclear Talks	60 Days
Primary Goal	Ensure Iran does not get a nuclear weapon
Iran's Nuclear Commitment	Neither produce nor acquire a nuclear weapon
Maritime Blockade	Ends immediately
Strait of Hormuz	Reopening within 30 days
US Naval Commitment	Complete lifting of naval blockade
Sanctions Relief	Suspension of sanctions on Iranian oil and petrochemical sales
US Financial Commitment	Release of $24 billion in blocked Iranian funds
Military Operations	All operations, including in Lebanon, cease from tonight
War Commitment	Immediate and permanent end to war on all fronts
Final Agreement Mechanism	Endorsement by a UN Security Council resolution
Final Talks Condition	Begin after the other party implements MOU commitments
Excluded from Negotiations	Iran's missile program and support for resistance groups

Upcoming Negotiations in Switzerland

Foreign Minister Araqchi confirmed that talks between the heads of negotiating teams will begin this Friday in Switzerland. The first round of negotiations is scheduled to follow the signing of the MOU between Iran and the U.S. The process of negotiations and implementation of the agreement is planned based on distrust, breach of commitments, and past experiences.

Regional Reactions and Security Incidents

Despite the agreement, regional security concerns persist. The Israeli government has stated it will not withdraw forces from Lebanon and Syria, as confirmed by Defense Minister Israel Katz. Meanwhile, the UK Maritime Trade Operations (UKMTO) reported an incident roughly 16 miles off the coast of Yemen, where a small skiff opened fire on a container vessel and attempted to board it. Trump announced the deal was complete, declared the Strait of Hormuz open to traffic, and confirmed that oil-carrying ships are now moving safely through the strait along a secure route, also referencing other safe travel areas.