Inside the US-Iran Draft Memorandum: The $300 Billion Fund, Frozen Assets, and Why Markets Are Still Skeptical

The Core Terms of the Draft MoU

A $300 Billion Reconstruction Fund Financed by the Gulf

One of the most striking elements of the draft is a proposed international investment and reconstruction fund for Iran worth up to $300 billion. The New York Times reported that the Trump administration has informally asked Gulf Arab countries to provide the financing, with China also expected to contribute . A diplomatic source told media that the US would support the establishment of the fund should a final agreement be reached . The fund is contingent on Iran agreeing to an end-of-war deal on acceptable terms .

Strait of Hormuz and the Naval Blockade

Freedom of navigation through the Strait of Hormuz remains central to the agreement. Under the draft, Iran would reopen the waterway and remove all naval mines within 30 days, while the US would lift its naval blockade within the same period and withdraw military forces from areas around Iran . The proposal also seeks to guarantee unrestricted commercial transit without tolls or harassment .

Iran's Nuclear Program

On the nuclear front, Iran would commit in writing to a moratorium on uranium enrichment, with a second phase of negotiations set to define the scope of any future enrichment program and the extent of international verification by the International Atomic Energy Agency (IAEA) . A report from the Arms Control Association noted that the proposed enrichment program could be tied to specific research reactors, though it warns the plan may be overly ambitious .

Non-Aggression and a Lebanon Clause

A mutual non-aggression pact is embedded in the framework, alongside a Lebanon peace clause linked to ending hostilities involving Hezbollah—an issue that has reportedly strained US-Israeli relations . An Iranian lawmaker also confirmed the draft includes a commitment by both sides not to use force against each other .

The $24 Billion Frozen Asset Demand

Iran's demand for the release of approximately $24 billion in frozen overseas assets has emerged as what pro-regime media call the "last serious disagreement" before talks can progress . According to Iran's Tasnim news agency:

• $12 billion would be released immediately upon signing the MoU.
• $12 billion would be transferred within 60 days .

Top Iranian negotiator and parliament speaker Mohammad Bagher Ghalibaf traveled to Qatar specifically to secure this phased release . A broader WSJ report indicated Iran is ultimately seeking control over a portion of the estimated $100 billion in assets frozen by Western nations .

Outstanding Obstacles and Verification Gaps

Despite the detailed draft, significant hurdles remain:

• No presidential endorsement: Vice President JD Vance cautioned that President Trump has not yet approved the framework, and negotiators are still debating key enforcement mechanisms .
• Iran's demand for a comprehensive agreement: Tehran has consistently stated it wants a full agreement rather than a one-page framework that defers major disputes to later talks .
• Continued military clashes: Both sides have continued to strike each other even as negotiations progress, undermining confidence in a durable ceasefire .
• Unspecified IAEA verification: The exact scope of international inspections remains unresolved, leaving a critical enforcement gap in the nuclear moratorium .
• Contested leaks: On May 27, Iranian television broadcast what it claimed was a draft of the memorandum, which US officials quickly labeled a "complete fabrication" and "not true," triggering immediate market reversals .

Cautious Markets: Optimism with Sharp Reversals

Currency and equity markets have become a real-time barometer for the talks, reacting to each headline with pronounced, short-lived swings:

• May 21: Reports that a final draft was reached sent the dollar index down 0.3% and Brent crude down roughly 1.5%, as traders priced in lower geopolitical risk .
• May 27: An Iranian television leak of the draft initially weakened the dollar and pushed down oil prices, but the moves reversed sharply when US officials denied the document's authenticity. Crude oil closed up 2.73% at $91.10 per barrel, and the dollar index edged higher .
• Equities: The Dow Jones Industrial Average hit a fresh all-time high on May 27, and the S&P 500 remained flat, suggesting that equity markets have either largely priced in a deal or are focusing on other fundamental factors .

The broader theme across asset classes is a pattern of cautious optimism punctuated by sudden reversals. As one analysis noted, the market "is leaning toward the idea that a deal eventually happens, without paying up for it" . Until a signed memorandum and a clear presidential endorsement materialize, skepticism is likely to remain the dominant posture.