Iran Declares Islamabad Agreement in Full Crisis Mode

Iran announced on July 13, 2026, that the Islamabad agreement was in "full crisis mode" after accusing Washington of breaching the 14-point memorandum. The announcement followed new US military strikes against Iranian targets which aimed to limit Tehran's capacity to strike commercial and civilian ships in the Strait of Hormuz.

Tehran struck back with drone and missile strikes against American military installations throughout the Gulf. The fragile diplomatic truce now looks to be falling apart.

Esmail Baghaei, the spokesperson for the Iranian Foreign Ministry, accused the US of "mutilating" the memorandum while adding that Tehran did not breach the agreement.

The Disputed Memorandum

The spokesperson highlighted the fifth clause of the agreement which section gave Tehran a 60-day period to meet its obligations regarding the shipping lane.

"Washington prevented the provision from being implemented in the first place," Baghaei said.

The 14-point pact, signed in June, demanded a swift and lasting cessation of hostilities across every theater, including Lebanon. It required both nations to honor each other's borders and allowed a two-month period to hammer out a permanent treaty backed by a mandatory UN Security Council resolution.

The agreement required Washington to end its naval blockade of Iran within 30 days. The US and its regional allies also had to organize a $300bn rebuilding program, grant immediate export waivers for Iranian energy, unfreeze assets and set a timeline to scrap all unilateral and multilateral sanctions.

Tehran committed to not developing nuclear weapons and down-blending enriched materials on-site under IAEA supervision. Under the agreement, an executive monitoring system and a sequencing rule were set up. This rule dictated that talks on other terms would start only after these initial security, shipping and financial measures were underway.

Economic and Maritime Fallout

The renewed hostilities immediately rattled global energy markets. Brent crude rose by 4.7% to $79.59 per barrel on July 13, 2026. Other trading indexes priced Brent futures between $78.68 and $79.29 per barrel.

Shipping has ground to a near standstill. Since the confrontation erupted in late February 2026, transit volumes through the Strait of Hormuz have dropped significantly.

According to media reports, by July 13, 2026, only six ships sailed through the strategic channel, marking a five-week low. This compares to a pre-conflict average of 120 to 130 vessels daily.

Tehran insisted the shipping lane remains shut while Washington disputes this claim, declaring the waterway open and promising to protect commercial transit.