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

📌 Summary:

• Energy tankers were attacked near the Strait of Hormuz; the US retaliated by striking 80+ Iranian military targets (air defences, command networks, coastal radars, anti-ship missiles, 60+ IRGC small boats); Iran claimed retaliatory strikes on US assets in Bahrain and Kuwait

• Oil prices surged — Brent futures neared $80/barrel, up nearly 7%; during the war's peak disruption prices had crossed $100/barrel, one of the worst energy supply crises ever

• Strategic stakes: the Strait of Hormuz normally carries about one-fifth of global oil and LNG flows; the bulk is consumed by Asian importers, making India especially exposed

• Root cause — ambiguity in the June 17 US-Iran MoU: it aimed to reopen Hormuz but left control and traffic management deliberately vague; Iran insists vessels use its designated routes with permission (and plans a transit service fee), while the US and allies push routes hugging Oman

• Trump declared the MoU "over" and the US revoked the sanctions waiver for Iranian oil — making Tehran's crude unpalatable to most buyers except China

• Experts still expect de-escalation: neither side wants full-scale conflict; Iran's tanker attacks were likely aimed at forcing use of its routes, US coastal strikes a warning

🎯 UPSC Relevance: GS3 Economy/Energy Security — India's crude import vulnerability to chokepoint disruptions; GS2 IR — West Asia geopolitics

📝 Prelims Facts:

• Strait of Hormuz: between Iran and Oman, links Persian Gulf to Gulf of Oman; ~20% of global oil and LNG transit
• Brent crude neared $80/barrel amid the flare-up (up ~7%)
• IRGC: Islamic Revolutionary Guard Corps

🔑 Key Term: Maritime chokepoint — a narrow strategic waterway (Hormuz, Malacca, Bab-el-Mandeb, Suez) whose closure disrupts global trade and energy flows