The conflict in the Middle East, particularly concerning the Strait of Hormuz, has intensified, with the US-Iran memorandum of understanding having expired and no extension planned. Fereidun Fesharaki, Chairman of FGE, suggests that Iran is likely to attack US interests and bases, aiming to initiate a war that could lead to negotiations. This aggressive stance is attributed to the current "war of attrition" where a US blockade is severely impacting Iran's economy, as evidenced by a severe gasoline shortage and overall choking of their system.
While the US maintains the Strait of Hormuz is open, Iran claims it is shut. Observational data indicates a significant reduction in crude and refined product movement through the strait. Before the war, 50 million barrels of crude and 5 million barrels of other products passed through daily. Currently, about 5-6 million barrels per day (bpd) of crude, with an additional 2 million bpd moving discreetly, and approximately 3-4 million bpd through pipelines via the Red Sea, sum up to 11-12 million bpd of crude. However, there is almost zero movement of refined products.
If Iran carries out these anticipated attacks, the remaining oil volume currently passing through the Strait would also be disrupted. The Iranian regime's strategy appears to be to provoke a crisis that could force a resolution, as the current economic pressure is unsustainable. They are seeking a situation that can result in a more favorable agreement, indicating a deliberate move towards escalation rather than continued economic strangulation.
