US-Iran peace talks are off to a rocky start after signing 14-point MoU

The countdown begins: The USA and Iran now have 60 days to turn the 14-point MoU the pair signed yesterday into a permanent peace agreement. A long spate of thorny issues await — as well as spoilers lurking to bring back the fighting — mainly Israel and hardliners in Iran. For many in the GCC, the absence of any provisions that limit Iran’s ballistic capabilities is alarming. Meanwhile, Israel is yet to commit to a ceasefire in Lebanon despite MoU provisions pledging to end hostilities there.

The process is already off to a rough start as talks that were scheduled to take place later today in Geneva were called off and US Vice President JD Vance scrapped his travel plans to Switzerland. It remains unclear when the talks are now scheduled to begin.

Windfall expected for Iran — now it has to sell it to hardliners

Iran could emerge with a score of wins if this moves ahead. On top of lifting oil sanctions and the USD 300 bn investment vehicle that were reported on earlier this week, Iran could regain access to some USD 100 bn in frozen assets abroad, mostly from unrepatriated crude revenues. Estimates put China as the top holder with some USD 20-50 bn, followed by Iraq with about USD 15 bn, USD 7 bn in each of India and South Korea, USD 6 bn in Qatar, and USD 3 bn from Japan. Luxemburg and the US also hold USD 2 bn each.

But all this windfall may be too little for an increasingly influential camp of hardliners in Iran. An emerging group of parliamentarians has been raising public pressure and staging public protests against Foreign Minister Abbas Araghchi and Parliament Speaker Mohammad-Bagher Ghalibaf, who both are leading Iran’s negotiations with Israel, the Guardian reports.

Hormuz rush loading

Everyone now is rushing to load crude from Iraq and the GCC — but the outcome is uneven. Chinese importers PetroChina and Sinochem have so far failed to secure very large crude carriers (VLCCs) at a reasonable rate for late June, with all the offers from shippers coming in at least at three times the pre-war rates, Reuters reports, citing unnamed company officials and shipping industry sources who are in the know. Meanwhile, India’s refining major the Indian Oil Company received no offers at all in a recent tender to lift crude from Iraq next week, one of the sources adds.

While Chinese and Asian players are struggling, others may already be lifting from Iraq, freeing up storage space and setting the stage for the major producer to restore its production levels that collapsed earlier in the war due to lack of storage capacity, Bloomberg reports. The push has allowed Iraq to reach some 1.6 mn bb / d this week, up from 900k earlier this month, and some 20 tankers are already scheduled to arrive later this week, Basim Abdul Karim, director general of the Basra Oil Operations Center, reportedly said.

Meanwhile, Qatar is moving LNG tankers back toward the Gulf. Five empty Qatar-owned vessels are heading to Ras Laffan after idling outside Hormuz, with four more Qatar-linked tankers waiting in the Gulf of Oman that could attempt a Hormuz passage into the Persian Gulf.

Iran's tankers are moving too: Four Iran-linked vessels — including two supertankers capable of hauling 2 mn barrels each — switched on their transponders and sailed out of Hormuz or the Gulf of Oman ahead of the agreement signing, Bloomberg reports. At least three ships waiting at Chabahar port had also left their positions.

Bypass redundancy here to stay

Gulf producers are building Hormuz out of their supply chains — peace deal or not. The UAE is planning a third oil pipeline on top of fast-tracked expansion of the Habshan-Fujairah bypass to hit “zero Hormuz dependency,” Foreign Trade Minister Thani Al Zeyoudi told Bloomberg. The UAE is also accelerating investments in new infrastructure, including a new harbor to sit alongside the Eastern ports of Dibba, Fujairah, and Khor Fakkan, as well as more rail and road networks to eliminate reliance on the strait, Al Zeyoudi said.

Overseas storage is growing as a Gulf playbook: Saudi Aramco is meanwhile eyeing largeroverseas crude storage — starting with an expanded South Korea deal — joining Adnoc and Kuwait, which already run similar Ulsan storage-for-priority-access deals.