Senator Lindsey Graham (R-S.C.) warned that the United States would seize control of the Strait of Hormuz and "obliterate" Iran if a tentative diplomatic agreement fails, raising the stakes for global energy markets. His comments underscore the fragility of ongoing peace talks in Switzerland, where U.S. and Iranian officials are negotiating a memorandum of understanding (MOU) to de-escalate regional tensions. The potential for conflict over the strategic waterway, a critical chokepoint for global oil shipments, remains a central concern for investors and policymakers alike.

Graham articulated a hardline stance on potential Iranian aggression, specifically linking attacks by Hezbollah to direct retaliation against Iran. "When you use Hezbollah to attack Israel, I think the new policy will be, ‘We will attack Iran,’” he said in an interview on Face the Nation. He further stated that if the deal collapses, President Trump might take control of the Strait of Hormuz by force. In a post on X, Graham reiterated this position: "We want diplomacy to succeed. But if Iran tries to test us, we will obliterate them."

Despite the aggressive rhetoric, diplomatic channels have yielded some progress. Iran’s Foreign Minister Seyed Abbas Araghchi announced that the U.S. agreed to lift its naval blockade of the Strait of Hormuz following early talks in Switzerland. As part of the broader framework, restrictions on Iranian oil and petrochemical exports were eased, and some frozen assets were released. Energy Secretary Chris Wright confirmed that oil and gas flows through the strait have returned to normal, suggesting a stabilization in energy markets.

Former national security adviser John Bolton expressed skepticism regarding the reliability of the Iranian regime in honoring international agreements. Citing recent violence against civilians, Bolton argued that the leadership's history makes trust difficult. "In Iran, we are dealing with a regime that as recently as January, slaughtered tens of thousands of its own civilians in the streets. That’s not the kind of regime that honors international agreements," he wrote on X.

Negotiations face significant hurdles, including President Trump’s threats to seize the strait and launch fresh strikes if Iran’s proxies do not cease activities in Lebanon. Graham also predicted the potential expansion of the Abraham Accords, with Saudi Arabia possibly joining in 2026, contingent on regional stability. U.S. intelligence has previously warned that Israeli Prime Minister Benjamin Netanyahu might undermine the deal due to political pressures, adding another layer of complexity to the peace process.

Susan Rice, who served as national security adviser under former President Barack Obama, has voiced strong criticism against the Trump administration’s preliminary agreement with Iran, calling it egregious. Rice labeled the deal a “strategic blunder,” highlighting concerns over the concessions made to Iran. In an interview with ABC News, she argued that the United States has made excessive concessions, leading to a “very bad outcome.”

Rice stated that the concessions granted to Iran were given prematurely in a “flimsy, two-page memorandum of understanding.” She emphasized that such concessions should have been reserved for a comprehensive deal addressing Iran’s nuclear program. “In the Obama-era deal, they could only spend those frozen assets on humanitarian things — food and medicine. Now they can use it to fund their terrorist proxies,” she said.

According to Rice, the current agreement lacks definitive terms on Iran’s nuclear issues. While Iran reaffirms not to develop nuclear weapons, the memorandum’s text is vague on enrichment limits and stockpile management. She also criticized the economic benefits Iran would gain, such as selling oil freely and accessing frozen assets without restrictions.

Rice highlighted the implications for the Strait of Hormuz and the $300 billion reconstruction fund for Iran. U.S. officials, however, stated that Iran would face economic rewards only if it complies with the deal. The criticism comes amid heightened tensions between the U.S. and Iran, with President Donald Trump issuing a stern warning to Iran on Sunday.

Trump threatened severe consequences if Iran’s proxies in Lebanon do not cease their activities. He also hinted at potential economic measures, such as charging tolls in the Strait of Hormuz if the peace deal collapses. This waterway is crucial for global oil and gas shipments, and any instability could have significant implications for energy markets.