The first formal negotiations under the US-Iran memorandum of understanding (MOU) nearly collapsed on Sunday after Iran’s delegation walked out of the Bürgenstock resort in Switzerland in protest against fresh threats by President Donald Trump. The Iranian state news agency IRNA reported the team had left the building after a meeting with Qatari mediators, citing Trump’s social media post that Washington would “hit Iran very hard again” if it did not rein in its “highly paid proxies” in Lebanon. A diplomat with knowledge of the talks later told AFP the Iranians had not quit the process, and a US official confirmed to Reuters that discussions continued deep into the night.

Trump’s threats, issued simultaneously on Truth Social and in a Fox News interview, warned Tehran it would “not have a country” if it closed the Strait of Hormuz again and raised the prospect of US tolls on oil shipments. Viewed from Washington, the administration was signalling maximum pressure to enforce the MOU’s ceasefire provisions, particularly regarding Lebanon, where Israeli strikes against Hezbollah persisted. Tehran, however, insisted that all hostilities must cease before substantive negotiations on its nuclear programme or sanctions relief could begin. The head of Iran’s negotiating team, Mohammad Bagher Ghalibaf, dismissed the warnings, saying the armed forces were “ready to respond” and that the US should be “careful with their statements.”

The walkout, whether symbolic or temporary, exposed the fragility of the 14-point MOU signed on 17 June. Iran had reimposed a blockade of the Strait of Hormuz on 20 June, citing Israel’s failure to halt attacks on Hezbollah, in a direct challenge to the agreement’s call for an end to fighting on all fronts. Shipping data showed an immediate drop in traffic through the chokepoint, with only one small tanker crossing after the announcement, though the US Navy maintained the waterway remained open. The incident pushed crude oil prices up nearly 3 per cent before markets opened on Monday, reflecting fears of a renewed energy crisis.

The MOU, mediated by Qatar and Pakistan, established a 60-day window to negotiate a permanent settlement covering Iran’s nuclear ambitions, sanctions, and regional security. US Vice President JD Vance, leading the American delegation, had earlier emphasised progress toward a Lebanon ceasefire, calling the moment “an opportunity to turn over a new leaf.” But the simultaneous exchange of ultimatums underscored deep mistrust. Diplomats in Lucerne sought to clarify “confusing messaging” and set up deconfliction mechanisms for the strait, while Iran conditioned further talks on the delivery of promised economic benefits, including access to frozen assets and oil export waivers. As technical teams prepared to continue meetings through the week, the incident demonstrated how quickly the diplomatic track could be derailed by unscripted presidential interventions.