July 14, 2026 | Policy Brief
Ceasefire Collapse Restores U.S. Leverage as Sanctions, Strikes Weaken Iran’s Hand
July 14, 2026 | Policy Brief
Ceasefire Collapse Restores U.S. Leverage as Sanctions, Strikes Weaken Iran’s Hand
The memorandum of understanding (MOU) between the United States and Iran was meant to secure a 60-day ceasefire.
Instead, the Islamic Republic has repeatedly attacked commercial vessels operating in or near the Strait of Hormuz and launched missiles and drones against sites used by the United States in multiple Arab countries.
In response, Washington sanctioned a key Iranian financier and a network of exchange houses on July 10. These amounted to the first new economic penalties imposed since the MOU was signed, sending a signal that the United States is prepared to use financial pressure, alongside military strikes, in response to Iranian violations of the agreement.
The sanctions came hours after President Donald Trump declared online that negotiations would continue even though Washington had told Tehran “in no uncertain terms, that the Cease Fire is OVER!” Then, on July 13, Trump announced the reimposition of a blockade of Iranian ports. Whatever remains of the MOU, negotiations now continue amid active hostilities, giving Washington greater leverage to raise the costs of Iranian intransigence.
New Sanctions Target Iranian Kleptocracy, Exchange Houses
The July 10 package targeted Ali Ansari, who “made a name for himself by institutionalizing embezzlement within the Iranian regime,” according to the Treasury Department. Figures like Ansari sit atop the regime’s kleptocracy, stealing from the Iranian people and moving billions abroad. Treasury also sanctioned several Iranian exchange houses that each moved hundreds of millions of dollars for sanctioned customers or banks, along with front companies in Hong Kong and the United Arab Emirates (UAE). Both jurisdictions are hubs for Iranian sanctions evasion. In April, Treasury Secretary Scott Bessent said banks in China, Hong Kong, the UAE, and Oman received warning letters about such activity and the secondary sanctions exposure it creates.
U.S. Revokes Relief Measure, Strikes Iran To Protect Hormuz Shipping
The July 10 sanctions followed Iranian attacks on vessels in the strait, which prompted the Trump administration to revoke a flawed 60-day authorization permitting sales of Iranian crude oil, petroleum products, and petrochemicals. U.S. Central Command (CENTCOM) also struck various Iranian military targets, including missile and drone sites to degrade Tehran’s ability to threaten commercial shipping.
In early May, CENTCOM launched the short-lived Project Freedom to facilitate commercial transit through the strait. Concerned about potential Iranian retaliation, Kuwait and Saudi Arabia denied the United States use of their bases for the initiative. Even so, CENTCOM says U.S. forces have helped move more than 800 commercial vessels and 400 million barrels of crude through the Strait of Hormuz since early May.
Announcing the renewed blockade on July 13, Trump also stated the United States would collect fees equaling 20 percent of cargo values from ships transiting the strait to support “the job of providing safety and security.”
Broader Pressure Will Strengthen U.S. Negotiators
Recent sanctions and strikes have strengthened Washington’s position, but they will not produce durable negotiating leverage if confined to retaliation for attacks in the strait. With the ceasefire effectively over, the United States should resume broader economic and military pressure against the regime and its enablers.
Washington should establish an allied counter-kleptocracy campaign to identify, freeze, and, where legally permissible, seize assets held abroad by regime insiders such as Ansari. Treasury should also issue a proposed rule under Section 311 of the USA PATRIOT Act requiring enhanced due diligence for transactions through Hong Kong and the UAE with high likelihood of Iranian involvement, while delaying final implementation to give local regulators a last opportunity to act.
Military pressure should likewise extend to facilities enabling Iran to rebuild its nuclear and missile infrastructure. Recent satellite imagery reportedly shows repair work at Taleghan 2, a suspected nuclear weapons research facility at Parchin, and activity at Pickaxe Mountain, a suspected underground nuclear site near Isfahan. The administration should make clear that reconstruction at these sites, or elsewhere, will trigger strikes against both the facilities and the firms enabling their reconstruction.
Max Meizlish is a research fellow for the Center on Economic and Financial Power (CEFP) at the Foundation for Defense of Democracies (FDD). For more analysis from Max, please subscribe HERE. Follow FDD on X @FDD and @FDD_CEFP. Follow Max on X @maxmeizlish. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.
Facts Only
* The memorandum of understanding (MOU) was meant to secure a 60-day ceasefire.
* Iran repeatedly attacked commercial vessels operating in or near the Strait of Hormuz and launched missiles and drones against sites used by the United States in multiple Arab countries.
* On July 10, Washington sanctioned Ali Ansari, an Iranian financier associated with institutionalizing embezzlement, and several Iranian exchange houses, along with front companies in Hong Kong and the UAE.
* The sanctions were the first new economic penalties imposed since the MOU was signed.
* The sanctions followed Iranian attacks on vessels in the strait, which prompted the revocation of a 60-day authorization for selling Iranian crude oil, petroleum products, and petrochemicals.
* U.S. Central Command (CENTCOM) struck various Iranian military targets, including missile and drone sites.
* On July 13, the United States announced the reimposition of a blockade of Iranian ports and stated it would collect fees equaling 20 percent of cargo values from ships transiting the strait.
* U.S. forces reportedly helped move more than 800 commercial vessels and 400 million barrels of crude through the Strait of Hormuz since early May.
Executive Summary
Full Take
The sequence of events demonstrates a dynamic where military actions are met with escalatory economic and operational responses designed to alter negotiating leverage. The initial framework of the MOU appears to have collapsed under active hostilities, immediately shifting the strategic focus from negotiated agreement to coercive pressure. The imposition of sanctions targeting financial facilitators and evasion hubs suggests a strategy aimed at dismantling the regime's economic capacity rather than simply punishing specific military acts. This approach targets the infrastructure that enables the ruling structure, exemplified by focusing on kleptocracy and cross-border finance.
The broader policy recommendations suggest a necessary shift from reactive retaliation to proactive strategic pressure. The call for an allied counter-kleptocracy campaign and the imposition of enhanced due diligence rules seek to address the systemic issue of asset movement abroad. Furthermore, extending military pressure to facilities enabling nuclear infrastructure development links kinetic action directly to long-term existential concerns. This pattern suggests that effective leverage is not derived solely from immediate military retaliation against specific incidents but from exerting sustained pressure on the regime's ability to govern and sustain itself across multiple domains—economic, financial, and physical security. The underlying implication is that negotiating power in volatile situations is established by controlling the pathways of capital and the control over critical infrastructure, rather than simply responding to localized aggression.
Bridge Questions: If economic sanctions are intended to be durable leverage, what specific mechanisms would ensure compliance or continued impact beyond immediate response? How can international frameworks be constructed to effectively freeze assets held by regime insiders without undermining legitimate financial flows in compliant jurisdictions? What is the long-term relationship between targeted asset seizure and achieving political concessions in protracted conflicts?
Sentinel — Human
This appears to be a policy brief structured around a specific geopolitical event, containing factual claims mixed with strong, prescriptive analytical recommendations from an established research perspective.