The attempt to diplomatically channel the war between the United States and Iran reached a critical date this Monday. Donald Trump has ruled out extending the memorandum of understanding signed with Tehran two months ago, whose 60-day deadline to negotiate a definitive agreement expired this August 17, and has directly demanded Iranian surrender.
The escalation of tension has coincided with a new rise in oil prices. Brent futures have ended up advancing around 2.7%, to $90.87 per barrel, while West Texas Intermediate (WTI) has risen 2.5%, to $84.50. During the session, Brent reached around $91 after the seizure of an oil tanker in the Strait of Hormuz was announced by Iranian media.
Trump demands Iran surrender
Trump has hardened his rhetoric against Tehran this Monday. "They should raise the white flag of surrender," the U.S. president stated in an interview with Fox News, according to Reuters.
The president also reiterated that preventing Iran from having a nuclear weapon remains one of Washington's main objectives.
The statements come precisely as the deadline established in the memorandum of understanding signed on June 17 expires. The document contemplated a maximum period of 60 days, extendable by agreement of the parties, to reach a broader pact on issues such as the Iranian nuclear program and U.S. sanctions.
However, that understanding deteriorated rapidly. Trump already declared the agreement "terminated" on July 7, and a week later, the Iranian Foreign Ministry considered it "suspended."
Hormuz, the great focal point of tension
At the center of the confrontation remains the Strait of Hormuz, one of the strategic maritime passages for global energy supply. Before the war began, approximately one-fifth of the world's oil and liquefied natural gas passed through this route.
Washington and Tehran maintain opposing positions regarding its control. Iran argues that the memorandum signed in June recognized its ability to manage the strait, geographically shared with Oman, while the United States rejects that interpretation.
Maritime traffic has drastically reduced. According to data collected by Reuters, only five ships crossed Hormuz on Saturday and none did so on Sunday, compared to the 31 recorded during the previous weekend.
This Monday, moreover, media linked to the Iranian state have reported the detention of a tanker that was supposedly trying to cross the strait. The identity of the ship and its cargo could not initially be verified. The news contributed to accelerating crude oil prices during the session.
Iran threatens to move to an "offensive" strategy
The pressure does not only come from Washington. A senior Iranian official has assured Reuters that Tehran is willing to move from a defensive strategy to a "fully offensive" one in light of the blockage of negotiations.
Iran warns that it could escalate tensions in Hormuz and launch a military operation to try to break the U.S. naval blockade if Washington does not comply with the provisional agreement in the coming weeks.
The situation adds uncertainty to a conflict that began in late February and continues to have energy supply as one of its main international repercussions.
Oil returns above 90 dollars
Energy markets have reacted throughout the war to news from the Persian Gulf. Brent reached a high of 126 dollars per barrel since the beginning of the conflict, about 75% above pre-war levels, before subsequently moderating its price.
This Monday had started the day practically stable, around 88.5 dollars, but the subsequent tension in Hormuz drove purchases to place it again above 90 dollars.
The behavior of crude oil will now especially depend on whether oil traffic through Hormuz suffers new interruptions and whether Washington and Tehran find any way to resume negotiations. For now, the expiration of the deadline set in the June agreement arrives without a definitive pact and accompanied by new threats between the two parties.