The collapse of the US-Iran MoU threatens to bring oil exports through the Strait of Hormuz grinding to a halt once again, raising the prospect of a destabilizing price spike. Global oil inventories have fallen sharply since the start of the conflict on 28 February, and the buffer now is much thinner than on 13 April, when the US imposed its first blockade on Iranian ports and vessels (MEES, 17 April).
The blockade had been lifted after the 17 June signing of the MoU but was reinstated less than a month later at 4PM EST on 14 July, two days after Iran’s IRGC claimed to have closed the strait again. Iran wasted no time exporting as much as 60mn barrels while the fragile MoU was in force, and the Arab Gulf states exceeded expectations with rapid increases in production and exports (MEES, 3 July). (CONTINUED - 1079 WORDS)
