Iranian regime likely to rebuild military with funds released by MoU, ISW assesses

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A symbolic mockup of an Iranian missile is displayed, amid a ceasefire between U.S. and Iran, in Tehran, Iran, April 27, 2026.
A symbolic mockup of an Iranian missile is displayed, amid a ceasefire between U.S. and Iran, in Tehran, Iran, April 27, 2026.
(photo credit: MAJID ASGARIPOUR/REUTERS)

The economic relief granted to Iran under the reported terms of the Memorandum of Understanding (MoU) would likely allow the Islamic regime to immediately reconstitute its military powers, according to an assessment published by the American think tank the Institute for the Study of War (ISW) on Tuesday.

Though US President Donald Trump denied reports of a $300 billion fund slated for Iran in comments on the sidelines of the G7 summit on Wednesday, ISW noted that Iranian officials have already promised that funds set to be released as part of the deal would be used to rebuild its missile and drone programs.

Iran’s Foreign Ministry Spokesperson Esmail Baghaei told Iranian press in May, “I think even the stones of Mina would be moved to tears upon hearing such absurd statements from American officials, who, after nearly 73 years of hostile actions against the Iranian people, still claim to care about them and pretend to be upset because, in their view, Iran’s money has been spent on missiles and drones…

“Of course, we spend part of Iran’s money on missiles and drones, because if we did not, our enemies would have been able to achieve their ambitions, as we have repeatedly seen over the past few months…”

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