The 60-day ceasefire between the United States and Iran expired Monday without either side implementing the terms of the June 17 Islamabad memorandum of understanding, leaving the Strait of Hormuz closed and global oil supply routes disrupted.
Iranian Foreign Minister Abbas Araghchi said Saturday that “there was no 60-day ceasefire” requiring an extension, insisting the memorandum concerned ending the war entirely. Washington views the deadline as the expiration of a temporary truce, creating a fundamental dispute over the legal status of the agreement that has governed the fragile peace since June.
Strait of Hormuz Remains Closed
Tehran has reclosed the Strait of Hormuz following what it describes as a US attempt to establish an alternative shipping route, while Washington has reinstated a naval blockade of Iranian ports. The waterway, which handles roughly 20 percent of global daily oil supply, has been effectively shut for most of the conflict that began with US-Israeli strikes on February 28.
Iran has set six conditions for any renewed negotiations, including a permanent end to attacks against Iran and its regional allies, the lifting of the naval blockade and sanctions, the withdrawal of US forces from Iran’s vicinity, compensation for wars imposed on Iran, and the unconditional release of frozen Iranian assets. Analysts say the conditions represent a significant escalation from earlier negotiating positions.
Oil Markets Face Renewed Uncertainty
The expiry of the ceasefire adds fresh uncertainty to oil markets that have already been whipsawed by months of conflict. Brent crude traded around $84 per barrel in recent sessions, down from peaks above $126 during the worst of the Hormuz disruptions but still well above pre-war levels near $70.
The Iranian Revolutionary Guard Navy announced last week that it intercepted and stopped three oil tankers in the Strait of Hormuz, claiming they violated navigation rules. The incident underscored the continued risk to commercial shipping in the waterway even during the nominal ceasefire period.
Goldman Sachs analyst Jeffrey Currie recently described the situation as “Oil’s Perfect Storm,” citing the combination of Hormuz closure, Gulf infrastructure damage, and escalating Red Sea risks. Persian Gulf exporters are racing to make bypass routes permanent, signalling a structural shift in global energy trade patterns.
“What was declared in the Islamabad memorandum of understanding was the end of the war. The United States violated the memorandum, and the conflicts resumed.” – Iranian Foreign Minister Abbas Araghchi
Regional states are continuing diplomatic efforts to revive the Islamabad understanding, but prospects for a breakthrough appear slim given the hardening positions on both sides. The expiry of the ceasefire leaves the global oil market facing the prospect of renewed military escalation at a time when supply margins are already thin.
Sources: The New Arab; Reuters; AP; Arabic Trader
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