Oil prices sank to around $78 following the signing of a MOU between the US and Iran.
FOR supply chain professionals, the significance of the US-Iran Memorandum of Understanding extends far beyond the physical reopening of the Strait of Hormuz.
The Strait was only closed as a consequence of the recent conflict involving Iran, the US and Israel, meaning the agreement is fundamentally a de-escalation measure aimed at restoring stability to one of the world’s most important maritime chokepoints.
While markets have responded positively, supply chain leaders should avoid assuming an immediate return to normal.
Vessel traffic is only gradually resuming, insurers remain cautious and industry analysts expect weeks or even months before shipping flows, insurance premiums and freight rates fully normalise. Several hundred vessels were delayed during the crisis, creating a backlog that will take time to unwind.
