US Fails to Checkmate Iran in Gulf Oil Struggle

The recent US-Iran ceasefire has not led to improved global petroleum inventories, but rather allowed Iran to sell stranded oil and further deteriorate the US position. The temporary lifting of the blockade allowed Iran to send oil east, resulting in $6.5 billion in sales during the ceasefire period.

However, the pause in fighting did not recharge global petroleum inventories, which continued to fall due to reduced flows from the Gulf. This has led to a 75% drop in confirmed crude oil transits through the Strait of Hormuz. The situation was further complicated by the Houthi forces in Yemen announcing a maritime blockade of Saudi Arabia, which is likely to be beneficial to Iran.

The US has not taken decisive action to improve its position or negotiate a durable peace. Instead, it has repeatedly made wrong moves, including granting sanctions exemptions that did little to help Iran. The country's current minimum operational level for the Strategic Petroleum Reserve is 70 million barrels, which could permanently destroy storage capacity as salt caverns collapse.