The June Memorandum of Understanding that paused military operations in the Strait of Hormuz expired without a permanent deal, removing the diplomatic framework that had briefly allowed increased shipping traffic. The lapse leaves the waterway's transit levels far below normal as tensions persist.
The United Arab Emirates suspended all trade with Iran after reporting renewed ballistic missile fire, halting the resumption of maritime trade links. The suspension signals continued regional instability and further isolates Iran under sanctions.
Ship tracking data from Kpler shows oil flows through the Strait of Hormuz averaged 6.1 million barrels per day during the 60-day truce, totaling 374 million barrels. While nearly triple the level during active hostilities, the flow remains below pre-war norms. Preliminary data from Lloyd's List Intelligence recorded 73 transits between August 10 and 16, down from 91 the prior week.
The market resolution depends on the IMF Portwatch 7-day moving average of transit calls reaching 60 by September 30. The current probability of 5.5 percent reflects deep skepticism that traffic will rebound to that threshold given the diplomatic vacuum and renewed tensions.
A new diplomatic agreement or unilateral ceasefire would be the most likely catalyst for a rapid increase in transits. Absent such a development, the downward trend in weekly transits and the expiration of the truce suggest continued disruption in the Strait.
