ASINT / Geopolitics and Risks
The Islamabad MoU signed June 17 is a ceasefire framework, not a settlement. Both sides have emphasised that the memorandum is not a final settlement and that it will only become a deal at the end of the 60-day negotiation period. The distinction matters for energy markets and for the African operators and investors who absorbed the full cost of the Hormuz closure since March.
Global oil prices tumbled around 20% from their 2026 highs, with Brent crude trading around $92.56 as of late May, having suffered its worst month since the Covid-19 pandemic. The market has priced in relief. It has not priced in resolution.
Two elements of the MoU remain deliberately open. The first is the nuclear question. The MoU states that Iran has committed to not build a nuclear weapon — a commitment Iran has been making for 50 years. The question of Iran’s existing stockpile of enriched material and its broader nuclear programme will be addressed in the second phase of negotiations within the 60-day window. The second is the toll question. The MoU specifies toll-free passage for 60 days only, with the future administration of the strait to be worked out by Iran, Oman and other Gulf states. Iran has already signalled it intends to charge maritime service fees once the 60-day period expires.
For Africa, the 60-day window is a countdown with two possible outcomes. If negotiations produce a binding final deal endorsed by the UN Security Council, the energy price normalisation continues and the EU gas market remains open for Atlantic African producers to compete for long-term supply contracts. If the window closes without a final deal, the ceasefire architecture has no binding enforcement mechanism and the strait re-closes. African fuel importers, who have not rebuilt fiscal buffers from the first shock, face that scenario with significantly reduced capacity to absorb it.
The $92 Brent price is not low by pre-war standards. Before the conflict, Brent was trading below $70. Even once crude exports increase, consumers may not see immediate relief at the pump as oil must first be transported, refined and distributed before gasoline prices fully reflect lower crude costs. The MoU is a threshold crossed. The 60-day window is the interval that determines whether it becomes a floor or a false start.