Dire straits: Hormuz flare-up underscores precariousness of US-Iran MoU; oil market on edge

📌 Summary:

• Attacks on energy tankers near the Strait of Hormuz cracked the fragile three-week-old ceasefire under the June 17 US-Iran MoU; the US struck 80+ Iranian military targets (air defences, command networks, coastal radar, anti-ship missiles, 60+ IRGC boats); Iran claimed retaliatory strikes on US assets in Bahrain and Kuwait

• Brent crude neared $80/barrel, up nearly 7%; during the earlier full closure, prices had crossed $100 — one of the worst energy supply crises ever

• Why India is exposed: the Strait normally carries about one-fifth of global oil and LNG flows, and the bulk of these are consumed by Asian importers including India

• Root cause of the flare-up: the MoU left control and traffic management of the strait deliberately ambiguous — Iran claims sovereignty over parts of the waterway, insists ships use its designated routes with prior permission and plans a transit service fee; the US and allies push routes hugging Oman instead

• The tankers attacked were reportedly sailing outside Tehran-authorised lanes; the US has also revoked its sanctions waiver for Iranian oil, making Iranian crude unpalatable to most buyers except China

• Experts expect de-escalation — neither side wants full-scale conflict — but Iran's firing towards Bahrain/Kuwait signals willingness to widen turmoil; Trump says the MoU is 'over' even as talks continue

🎯 UPSC Relevance: GS3 Economy (energy security) and GS2 IR — maritime chokepoints, West Asia geopolitics, impact on India's crude import bill and inflation

📝 Prelims Facts:

• Strait of Hormuz lies between Iran and Oman, connecting the Persian Gulf to the Gulf of Oman/Arabian Sea

• It carries ~20% of global oil and LNG trade

• IRGC = Islamic Revolutionary Guard Corps of Iran

🔑 Key Term: Maritime chokepoint — a narrow strategic waterway through which a large share of global trade/energy must pass, whose closure disrupts world markets