US-Iran 60-Day MOU Reopens Strait of Hormuz, Oil Exports Resume
4h ago|4 min readStandard
Fazen Markets Editorial Desk
Collective editorial team · methodology
us-iran-dealstrait-of-hormuz
Fazen Markets Editorial Desk
Collective editorial team · methodology
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The United States and Iran signed a memorandum of understanding on June 16, 2026, extending their April ceasefire by 60 days to facilitate negotiations for a permanent agreement. The MOU, to be formally signed in Switzerland on Friday, reopens the Strait of Hormuz for commercial shipping and permits the immediate release of approximately $6 billion in frozen Iranian assets. Temporary sanctions waivers enable Iran to resume oil exports, potentially adding 500,000 to 1 million barrels per day to global markets. The agreement follows a period of heightened regional volatility that saw Brent crude futures trade above $90 per barrel in May.
The immediate catalyst for the deal was a multi-week stalemate following the April ceasefire, which had begun to fray amid skirmishes in southern Lebanon and attacks on shipping lanes. The Biden administration, facing domestic pressure over elevated gasoline prices ahead of the US election cycle, prioritized stabilizing energy markets. For Iran, the urgent need to access frozen foreign currency reserves and stem a deepening economic crisis provided a compelling incentive to return to the negotiating table. The last significant diplomatic breakthrough between the two nations was the 2015 JCPOA, which capped Iran’s nuclear program in exchange for sanctions relief.
The current macro backdrop is defined by stubborn inflation and central banks’ cautious approach to interest rate cuts. The benchmark 10-year US Treasury yield has fluctuated between 4.2% and 4.5% this quarter, sensitive to energy-driven inflation expectations. A sustained drop in oil prices could provide the Federal Reserve with greater confidence to ease monetary policy. The geopolitical risk premium embedded in crude prices, estimated by analysts at $5-$8 per barrel throughout the second quarter, is now being reassessed.
The memorandum’s terms have direct, quantifiable market impacts. The Strait of Hormuz is a critical chokepoint, with about 21 million barrels of oil, or one-fifth of global consumption, passing through daily. The immediate release of $6 billion in frozen Iranian assets will provide liquidity to the Central Bank of Iran. Oil market analysts project Iranian exports could increase from current suppressed levels to between 1.5 and 2.0 million barrels per day within 60 days.
| Metric | Pre-MOU Level (June 2026) | Post-MOU Projection |
|---|---|---|
| Iranian Oil Exports | ~1.0 mbpd | 1.5 - 2.0 mbpd |
| Brent Crude Price | ~$88/barrel | $82 - $85/barrel range |
| Geopolitical Risk Premium | $5-$8/barrel | $2-$4/barrel |
This potential supply increase contrasts with OPEC+’s current production cuts of 3.66 million barrels per day. The energy sector ETF (XLE) declined 2.8% on early news of the deal, underperforming the S&P 500’s 0.3% gain for the session.
The most direct second-order effect is a bearish repricing of global oil benchmarks. Integrated supermajors like ExxonMobil (XOM) and Chevron (CVX) face near-term headwinds to upstream profitability, while downstream refiners such as Valero Energy (VLO) could see margin expansion from lower crude input costs. A decline in energy prices is a net positive for transport-heavy industries; airlines like Delta (DAL) and package carriers like FedEx (FDX) typically exhibit a negative correlation to jet fuel costs. The iShares Transportation Average ETF (IYT) rose 1.5% following the announcement.
A key risk to this outlook is Israel’s stance. Prime Minister Netanyahu’s declaration that Israel is not bound by the agreement and will not withdraw from southern Lebanon introduces a significant implementation risk. Any escalation between Israel and Iranian proxies like Hezbollah could swiftly reverse the positive momentum and reinstate the geopolitical risk premium. Hedge fund positioning data from the prior week showed a net long position in Brent futures of over 200,000 contracts, suggesting the sell-off may have been exacerbated by forced liquidations.
Market participants will monitor the formal signing ceremony in Switzerland on Friday for any deviations from the announced MOU terms. The next two OPEC+ meetings on July 1 and August 3 will be critical; the group may decide to deepen or extend its production cuts to offset the new Iranian supply and defend a price floor, perhaps near $80 per barrel for Brent. The weekly US inventory reports from the Energy Information Administration will provide the first evidence of increasing Iranian cargoes entering the global market.
Technical levels for Brent crude are now in focus. The 100-day moving average at $83.50 serves as immediate support, with a break below potentially targeting the $80 psychological level. Resistance sits at the June high of $90.50. The US Dollar Index (DXY) will also be sensitive to changes in the inflation narrative, with a sustained drop in oil prices potentially weakening the dollar if it allows for a more dovish Fed stance.
US retail gasoline prices, which averaged $3.68 per gallon nationally last week, are highly correlated with global crude benchmarks. A $5 per barrel drop in Brent crude typically translates to a 10-15 cent per gallon decrease at the pump over several weeks. The deal could provide relief to consumers and moderate headline inflation figures, which have been pressured by energy costs. The specific impact depends on how quickly Iranian oil reaches the market and the response from other oil producers.
The Strait of Hormuz has been a focal point of global energy security for decades. During the 2019-2020 "Tanker Wars," attacks on vessels and the seizure of a British-flagged tanker by Iran caused insurance premiums to spike and temporarily disrupted shipping. The strait is only 21 miles wide at its narrowest point, with all inbound and outbound tankers from Kuwait, Qatar, and the UAE transiting through two-mile-wide channels. Its closure is considered a major macroeconomic shock scenario.
Saudi Arabia and other Gulf Cooperation Council (GCC) members are directly impacted. They must balance budget requirements, which rely on oil prices above $80 per barrel for most, against the strategic desire for regional stability. For China, the largest buyer of Iranian oil, the deal promises a more secure and potentially discounted supply. European nations that were party to the original JCPOA may see an opportunity to re-engage with Iranian energy markets if a permanent deal is reached.
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