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Tehran, Iran Iran and the United States have returned to talks, and their military operations have been temporarily suspended, but the war continues to affect sea corridors beyond the Strait of Hormuz and domestic markets.
The complete closure of the waterway, the disruption of the Red Sea and the Iran-allied Houthis in Yemen and Ukraine are attacking an Iranian ship. in the Caspian Sea both have maintained high tensions.
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Iran’s government is also facing difficult decisions, including rising oil prices amid widespread economic and political discontent, while the US military is pushing to block the country’s southern ports for the second time.
The Oil Ministry said on Saturday that Iran had sold $11.5bn of crude oil during the war without specifying specific dates and $6.5bn during the now suspended agreement (MoU) signed with the US last month. It said that the combined figure represents 60 percent of the annual revenue in the budget.
The signing of the June 17 MoU led to the partial reopening of the Strait of Hormuz and the removal of US military restrictions on Iran, which eased pressure on international oil markets and allowed Iran to export oil stored in large tanks waiting to leave its waters. The Ministry of Oil in Iran said that the increase in oil prices created about $3bn in additional value in the first half of the year and $11bn from the harvest so far has been transferred to the government despite the US ban.
During the initial blockade that was imposed on April 13 and lasted for more than two months, Iranian officials confirmed this. near zero crude exports. A second blockade could also lead to a reduction in Iran’s exports and increased pressure Kharg Islandin which about 90 percent of Iran’s oil is exported, and other storage and export facilities in Iran, which will affect the production of petrochemical industries and create a cheap and slow recovery.
The US Central Command (CENTCOM) said that since Saturday, the military has guided 12 merchant ships trying to navigate the blockade that has been in place since mid-July, disabled two that did not cooperate and boarded two “to ensure full compliance”.
The US military also showed images of heavily armed soldiers descending from a helicopter onto the site of the Charminar, an Iranian-linked oil tanker seized by the US last year for allegedly part of the Shamkhani network. The US has said that Iranian oil magnate Mohammad Hossein Shamkhani plays a major role in Iran’s relations with Russia.
Iran has also said it has been directing several ships a day to keep the channel open as its military has determined it will not succumb to pressure. On Sunday, Iranian media reports said a ship exploded after hitting a naval mine in the Strait of Hormuz.
However, CENTCOM has stopped bombing Iran for two nights and US Ambassador to the United Nations Mike Waltz says that President Donald Trump is talking to Tehran “somewhere”.
Iran also dropped retaliatory threats across the region Foreign Ministry Spokesperson Esmaeil Baghaei said the talks with Oman on reopening the Strait of Hormuz have been fruitful.
A picture of the house
Restrictions on oil exports, however, are adding to Iran’s economic woes, which are linked to domestic problems and poor governance and years of strict sanctions.
Iran’s infrastructure has also been heavily damaged in the war that the US and Israel started at the end of February and could worsen if the conflict escalates.
The government said last month that about 230 million cubic meters (300 million cubic yards) on the day of Iran’s pre-war gas output, about 650 million cubic meters (850 million cubic yards) were lost due to US and Israeli bombs, increased electricity and lack of petrochemicals.
Sekhavat Asadi, director-general of the Pars Special Economic Energy Zone, said on Sunday that Iran hopes to restore more than 100 million cubic meters (130 million cubic yards) per day of its losses in the coming months.
Officials are also dealing with fuel shortages as the country faces a fuel shortage of more than 20 million liters (5.3 million gallons) per day. The shortage is managed through limited but cheap supplies, including fuel supplies, drawing on pre-war reserves and repeatedly asking citizens to consume less.
The Ministry of Petroleum has said that oil prices may be reduced every month if the imbalance continues.
The government said this week that it is seriously considering the price of the third phase of the oil distribution to private individuals.
Another hike in gasoline prices took place in December, weeks before the country was hit by the tsunami national protestsin which thousands of people were killed during the government riots in January. The overnight rise in fuel prices in November 2019 also led to deadly protests across the country.
The capital, Tehran, and cities across the country are experiencing power cuts, which are also causing water and communication disruptions. President Masoud Pezeshkian said he would order factories to remain closed until the end of September to prevent expansion a broken job market.
The closure of the Strait of Hormuz has also affected Iran’s trade with China, its largest trading partner and oil buyer, which has sharply reduced its crude oil output to match the effects of the war.
But Nonoil’s trade with China has also plunged since the start of the war, down 75 percent in March and June from a year earlier, according to Chinese data.
Two internet shutdowns imposed by the government, first during protests in January and then during the war, have only worsened Iran’s economy this year as it struggles with rising prices and a rapid decline in purchasing power.
A report last year by the Saba Pension Strategies Institute, a think tank affiliated with Iran’s state pension fund, found that while more than 30 percent of Iranians lived below the poverty line five years ago, that number is expected to reach 45 percent this year — and rising.
Spread to Bab al-Mandeb, Caspian Sea
After repeatedly threatening the Iranians that the escalation of the war could spread the number of maritime disturbances in the Red Sea, the Houthis in Yemen last week announced that they will be blocked by Saudi Arabia, return or hit the ships passing near the Bab al-Mandeb river and bomb the Saudi oil facilities.
Many ships continue to pass through the strait, including Chinese supertankers, but the cost of the war has risen, raising the cost of insurance for all.
Saudi officials, who lead the coalition supporting Yemen’s internationally recognized government against the Houthis, have responded by launching large-scale Yemeni attacks across Yemen.
And further north, Ukraine has confirmed it shot down a ship in the Caspian Sea that President Volodymyr Zelenskyy says was carrying military supplies linked to Iran.
Iranian officials said it was a commercial ship importing iron ore from Astrakhan, a port on the Volga River in Russia, to Bandar Anzali in northern Iran. They said one sailor was killed and three were injured.
The Ministry of Foreign Affairs of Iran called the authorities of Kyiv in Tehran to issue a strong protest and a warning that “the matter cannot be answered”.
These developments have raised concerns that the Caspian Sea, a waterway once used for trade, could once again become a hotbed of war.
Iran’s Caspian trade is mainly with Russia, Kazakhstan, Turkmenistan and Azerbaijan. They export essential commodities such as wheat and other crops, maize, barley and animal feed as well as timber and fertilisers.
The country’s exports through the northern sea route include construction materials, steel products, agricultural products and other refined and petrochemical products.
The growing tension in the war has only prompted government liaison experts to strengthen ties between China and Russia.
“Now we can say that the two wars in the Middle East and Ukraine are closely connected,” Mahdi Kharratiyan, a political analyst affiliated with Iran’s Islamic Revolutionary Guard Corps, wrote on X Sunday.
