US seeks UN inspections of Iran's nuclear sites as peace talks begin in Switzerland.
Washington is reportedly offering access to $6 billion in frozen Iranian funds as part of the negotiations.
Ongoing Israel-Lebanon tensions threaten the talks and risk further disruption to global energy supplies and trade through the Strait of Hormuz.
With the US and Iran signing an interim peace deal to halt the war, negotiations commence as US Vice President JD Vance arrives in Switzerland for the first round of peace talks.
The US delegation is expecting to hammer out the details for a nuclear deal with Iran, as Vance said to reporters, "I think we're going to hopefully make progress on the nuclear issue, make progress on the Lebanon ceasefire issue. Those are the two big things that I think we're to be focused on." Meanwhile, Israel’s ongoing strikes on Lebanon threaten to derail any real progress on the peace deal.
To combat this and successfully guarantee a nuclear site inspection in Iran, the US is using a $6 billion worth of negotiation chip.
What is the US demanding?
Before departing from Washington for the first leg of the 60-day peace deal negotiations, Vance told the press that the first round is aimed at "getting the actual structure and negotiation in place." Special importance is being given to addressing the nuclear issue between the two nations.
Axios reported that the US is expecting the first round to end with an invitation from Iran for a formal UN inspection of its nuclear sites. These sites were earlier bombed in the joint military effort of the US and Israel earlier in the year. The last such visit took place before the previous war in June, 2025.
In a private briefing on Thursday, President Donald Trump’s envoy Steve Witkoff claimed that Iran will invite the U.N.'s nuclear watchdog to inspect its nuclear sites and begin identifying the locations of Tehran’s enriched material, according to AP.
Notably, the Director General of the International Atomic Energy Agency is also participating in the talks.
In return for Iran allowing such inspections to be conducted, the US is offering to allow Iran access to its frozen funds, beginning the bargain with a $6 billion frozen account in Iran.
Who Pays the $6 Billion?
Iran has a long history of frozen assets, some of which have been frozen for nearly as long as the Islamic Republic, which dates to the 1979 revolution, has existed. However, now Trump offers a deal that could flip Iran’s economy: unfreezing assets worth tens of billions of dollars from around the world.
The eleventh point of the signed MoU states that the United States agrees to make Iran's frozen or restricted funds available for use once the MoU is implemented. First, the two countries will have to work out the exact procedures for how the money will be released. Here is where the US has found scope to negotiate a nuclear site assessment in exchange for unfreezing the $6 billion account in Qatar.
Whether the funds stay in their current accounts or are transferred elsewhere, they must be fully usable, not merely unfrozen on paper.
The Central Bank of Iran can designate who ultimately receives payments from these funds (for example, companies, government agencies, or other approved beneficiaries).
The United States promises to issue any licenses or authorisations needed under its sanctions regime to allow these transactions to take place legally.
It declares. “The United States of America undertakes to make fully available for use the frozen or restricted funds and assets of the Islamic Republic of Iran upon the implementation of the MOU. The United States of America and the Islamic Republic of Iran will mutually agree on the procedures related to the release of these funds. During the negotiations. Such funds, whether retain the original account or transfer, shall be made fully usable for payment to any ultimate beneficiary designed by the central bank. Ultimate beneficiary designated by the Central Bank of the Islamic Republic of Iran. The United States of America undertakes to issue all necessary licenses and authorisations accordingly.”
The Iranians would be able to use those funds to buy humanitarian goods.
Why is Iran Reluctant?
The biggest hurdle to this ‘give and take’ arrangement between the US and Iran is posed by Israel.
A US intelligence assessment has reportedly warned that Israeli Prime Minister Benjamin Netanyahu could complicate ongoing US-Iran peace negotiations as he faces mounting domestic pressure over Israel's conflict with Lebanon.
According to a report by The Washington Post, citing the intelligence assessment, Netanyahu is under political pressure at home to continue military operations against Hezbollah, the Iran-backed group based in Lebanon. The report said US intelligence officials believe Netanyahu's electoral prospects are tied to convincing Israeli voters that he will not withdraw Israeli troops from Lebanon.
Iran has called for a ceasefire in Lebanon times as Israel continues its attack.
Most recently, this has affected the situation with the Strait of Hormuz. While Donald Trump declared the Strait open to use and withdrew the US naval blockade, Iran closed the maritime route shortly after, citing Israel's continued fire on Lebanon after the signing of the MoU, calling it “bad faith” on behalf of the US.
Vance has acknowledged that the situation in Lebanon could derail the negotiations, "Despite the headlines, things are actually getting better there, and things are slowing down a little bit. It's going to be something we're just going to have to continuously manage to ensure that Israel and Lebanon are both safe and secure," he said.
The vice president added that Secretary of State Marco Rubio is handling de-escalation efforts. Yet the situation on the ground is different despite a stated truce in Lebanon. Israel has been exchanging fire with Hezbollah, leading to dozens of people being reported killed by Israeli strikes in Lebanon in the past two days, marking some of the worst bloodshed of the current conflict.
What Happens If Talks Fail?
U.S. President Donald Trump posted on Saturday that no toll will be charged for passage through the Strait of Hormuz during or after the 60-day interim ceasefire with Iran — unless the U.S. imposes one should peace talks fail.
He threatened to impose U.S. tolls on the Strait if a final deal with Iran isn't reached in 60 days, saying the money would be for "services rendered as the Guardian Angel to the countries of the Middle East." His social media post underscored that the agreement calls for toll-free travel for 60 days.
"There will be NO TOLLS in the Hormuz Strait for 60 days during the Cease Fire Period, and there will be NO TOLLS after the 60 day period has expired, unless they are imposed by and for the United States of America, should the deal not be completed, for services rendered as the Guardian Angel to the countries of the Middle East for purposes of both past, present, and future reimbursement of costs," Trump wrote in a post on Truth Social.
Thus, the US will likely impose a toll on the waterway in the case a deal is not reached at the end of the negotiating period.
Why The World Is Watching
A breakthrough in US-Iran negotiations would have implications far beyond the two countries. The deal could significantly stabilise trade through the Strait of Hormuz, one of the world's most critical energy corridors, through which roughly a fifth of global oil consumption and a quarter of seaborne oil trade passes.
The disruption has slashed oil, LNG and LPG exports from the Gulf, sent fuel prices soaring, and forced countries across Asia to scramble for alternative supplies. India has been among the hardest hit, with LPG imports dropping sharply and oil companies absorbing rising costs to shield consumers. Other major Asian importers, including Pakistan, Bangladesh, Thailand, the Philippines, Japan and South Korea, have also faced mounting pressure on energy supplies and prices. The crisis has already forced governments to draw on reserves, reroute shipments and pay significantly higher import costs.
A lasting US-Iran agreement could help reopen the Strait of Hormuz, restore energy flows, ease pressure on global oil and gas markets, and provide much-needed relief to an already strained world economy.
