Strait of Hormuz Closure Continues After Islamabad MoU Expires

The Strait of Hormuz, a critical waterway for global oil supplies, remains closed after a 60-day window under the Islamabad Memorandum of Understanding (MoU) expired on August 17 without an agreement or extension. The MoU, signed on June 17, aimed to establish a truce between Iran and the US but failed to meet its objectives.

During the 60-day period, around 374 million barrels (mb) of crude oil cleared the Mideast Gulf, averaging 6.1 million barrels per day (mbd). However, this is only about 40% of the approximately 15 mbd that the Strait of Hormuz averaged in 2025.

The MoU did clear a significant backlog of stranded ships within three weeks, reducing floating storage from 61 mb to 16 mb. Nevertheless, total crude on water inside the Gulf system remained above pre-war levels, indicating that the underlying issues were not addressed.

Tehran now asserts a permit-and-toll regime over the strait, while Washington rejects this claim. The US has maintained its convoy escorts and blockade enforcement, while Iran has declared the MoU nullified due to US violations.