Oil After-Shock Risk Outlives the US-Iran Truce Memo

Both Washington and Tehran have declared the June interim-truce memo dead, which makes Monday's expiry of its 60-day period a formality. Mint's editorial board says the market question now sits at the Strait of Hormuz, where each side claims control and ship traffic remains a trickle.

Whether the memo's peace terms receive a timeline extension is effectively inconsequential, the board said. Each side asserts permanent rights over the strait, or hints at them. The board reads that posture to mean shipping lanes can be held hostage by military force, and the result, it argues, is a mutually assured obstruction that has to end before released oil reserves run thin.

China and other buyers tapped strategic stockpiles to cool crude prices while the mutual strikes continued. Those barrels are finite. The cooling effect fades with each barrel consumed, the board wrote, and a still-blocked strait after the reserves are gone would confront the market with an oil after-shock.