Iran deal offers oil relief, but Hormuz risks remain

The US-Iran deal ending months of fighting and reopening the Strait of Hormuz will prompt a collective sigh of relief from energy exporters and importers alike.

- Ron Bousso

But the fragile calm may not prevent future flare-ups, casting doubt over how quickly — or fully — tanker traffic through the vital waterway can return to normal. Under the agreement announced late on Sunday, Iran and the US agreed to lift their blockades on the Strait of Hormuz, through which roughly a fifth of global oil and LNG flowed before the war broke out on Feb 28. The strait is expected to reopen once both sides formally sign the accord on Friday.

That is obviously good news for supply-strapped energy markets, but the deal leaves unresolved the key disputes that triggered the US and Israeli bombing campaign against Iran, including the future of Tehran’s nuclear programme.

That ambiguity opens significant room for confusion, disagreement and renewed confrontation. Indeed, tensions have already resurfaced. Iran’s insistence on linking any deal to Israel’s campaign against Hezbollah in Lebanon has threatened to derail the talks, as the Iranian-backed militia has repeatedly exchanged fire with Israel, including over the weekend. Even the status of Hormuz itself is far from clear. While both the US and Iran have committed to lifting their blockades, the deal leaves Tehran with a powerful lever.

Iran’s willingness and ability to choke off the strait for months has shattered a decades-old taboo, raising the prospect that it could do so again — or simply threaten to — whenever it seeks leverage over its Gulf neighbours or adversaries. That shift alone could have lasting consequences.