Oil Markets Defy Hormuz Gridlock as Ceasefire Optimism Takes Hold

The 60-day evacuation window established by the US-Iran memorandum of understanding has yet to trigger a mass exodus of vessels stranded since March. While Tehran continues to assert control over the waterway, demanding that passing ships secure permission from the Persian Gulf Strait Authority, the broader market outlook appears focused on recovery. This sentiment is bolstered by the resumption of Iranian crude exports, with three tankers carrying 5 million barrels transiting the Gulf of Oman this week.

Operational shifts are rippling across the Middle East. Kuwait has officially lifted force majeure on its upstream activities, aiming to recover from a production slump that saw output crater to 580,000 b/d last month. Similarly, Iraq’s Basra Oil Corp. reports a rebound to 1.5 million b/d, up from 900,000 b/d in May. Baghdad is not waiting for a permanent resolution to the Hormuz impasse; the government is moving to establish an export route through Syria, targeting 50,000 b/d starting in July.

Global energy strategies are adjusting to this volatile landscape. In Norway, Equinor has abandoned its 2030 renewables target, shifting 90% of capital expenditure back to oil and gas. Meanwhile, the White House has allowed Russian oil waivers to expire, putting pressure on Moscow as its exports hit 6 million b/d. The situation in Russia remains tense, as a fresh Ukrainian drone strike on the Moscow refinery—the second in days—forced a suspension of product sales on the Spimex exchange, heightening fears of domestic fuel shortages.