Brent crude oil futures rose above $88 a barrel on Thursday after the United States formally scrapped a June memorandum of understanding with Iran that had sought to reopen the Strait of Hormuz and restart nuclear talks in exchange for sanctions relief.
The accord, negotiated at the Palace of Versailles and signed by President Donald Trump, collapsed within weeks as Iranian-linked vessels resumed attacks on shipping in the region. Shipping traffic through the Strait of Hormuz remained subdued on Wednesday at 10 visible commodity vessel transits, up from eight the prior day but well below the 10-day moving average of roughly 15 vessels, according to data from Kpler.
The Trump administration on Tuesday launched "Operation Economic Outcast," a campaign expanding secondary sanctions to five sectors: digital assets, technology, gold, aviation and shipping. The move targets nearly 60 entities with the stated goal of tightening financial pressure on Tehran. U.S. Treasury Secretary Scott Bessent described the effort as an "economic onslaught against Iran's financial connections around the globe."
Iran’s Islamic Revolutionary Guard Corps (IRGC) reiterated on Wednesday that the Strait of Hormuz could be reopened within the framework of the original MOU if Washington reversed its decision. Brig. Gen. Hossein Mohebbi, the IRGC spokesman, said conditions set by Iran must be accepted by the United States before any compromise can be reached. Analysts noted the collapse of the June agreement has left mediators with little room to broker a new deal.
"The old MOU is essentially dead in all aspects," said Umer Karim, a researcher at the University of Birmingham. "The task of the mediators to have the two sides reach some sort of a compromise have become even more difficult in the current circumstances."
Diplomatic efforts to revive talks have stalled in recent days. Pakistan’s army chief Asim Munir traveled to Tehran with little progress, while Oman’s foreign minister attempted to finalize a transit-lane agreement that stalled as Iran pushed for greater control over shipping traffic. Qatar’s prime minister met Iran’s foreign minister in Tehran on Wednesday, issuing a joint statement that discussed heading off escalation and laying groundwork for talks but yielded no breakthrough.
Maritime risks remain elevated after a tanker was struck by an unknown projectile on Thursday, causing a fire that was later extinguished, according to the UK Maritime Trade Operations agency. The incident follows the six-month anniversary of strikes on Iran, underscoring the fragile security environment in the Gulf.
Oil prices have climbed in response to the renewed tensions, with Brent crude closing at $88.28 on Wednesday, reflecting concerns over potential disruptions to one of the world’s most critical chokepoints.
