Iran's MoU Rejection Pushes Brent to $89 as Hormuz Risk Returns

Iran's foreign ministry ruled out extending the 60-day US-Iran memorandum of understanding that expires Monday, pushing Brent crude up 0.92 percent to $89.33 per barrel as traders priced in renewed Strait of Hormuz disruption risk.

"We did not start any negotiations at all, and the US violated the understanding from the very beginning; therefore, the 60-day issue is not relevant," Esmaeil Baqaei, spokesperson for Iran's Foreign Ministry, said at his weekly press briefing.

WTI crude futures rose 0.76 percent to $83.03 per barrel. The MoU, signed June 17, was designed to reopen the Strait of Hormuz while both sides negotiated Tehran's nuclear program within 60 days. A senior Iranian official told Reuters that Tehran would shift to offense rather than relying on defense if diplomacy with the US fails.

The MoU's expiration without extension removes the diplomatic guardrail that had kept the strait open since June. Iran's armed forces are closely monitoring developments, Baqaei said, and Washington's concern has now shifted to the strait, which he said had been open before the US aggression.

Baqaei said there was no provision in the MoU text establishing a 60-day deadline — the document only envisaged negotiations on the nuclear issue within that window. "Iran is not a party that adjusts its policies under pressure and deadlines," he said. The US had initially cited the need to confront an imminent threat from Iran as the reason for launching the war, but the Pentagon itself rejected that claim. "They have trapped themselves in a quagmire and, in order to justify their failures, they are forced to change their objectives," Baqaei said.

Strait of Hormuz Returns to Center Stage

Washington's concern has now shifted to the Strait of Hormuz, which Baqaei said had been open before the aggression. "Under these circumstances, the best thing for the US is to extricate itself as soon as possible before becoming more deeply involved," he said, adding that acknowledging a mistake could pave the way for a correct decision, though he doubted US officials possessed "such courage."

The last time the strait faced closure risk was during the US-Israeli war of aggression that began February 28. The June 17 MoU was the mechanism that reopened it. With that framework now expired and Iran refusing to negotiate an extension, the supply-side risk premium embedded in crude prices is likely to persist. Baqaei also said the key outcome of the two recent wars was that regional countries have realized the US is an unreliable partner and that its presence has not contributed to security. "We invited the countries of the region to rely on themselves," he said.

Missing Pilots Add Diplomatic Friction

Separately, Baqaei said Tehran has been using diplomatic contacts and all available channels to determine the fate of four Iranian pilots who went missing during a defensive operation against a US military target in Qatar. Iran maintains regular contacts with Qatar and has conveyed its concerns regarding the missing pilots.

Iran has publicly assessed that three of the pilots — Javad Salehi, Abdolmajid Dashtian and Omran Behraveshian — were captured alive by Qatari forces after their Su-24s were hit by enemy air defenses while returning from a March 2 mission. A fourth pilot, Brigadier General Majid Kazemi, was martyred, with DNA testing confirming his death. Iran sent its first correspondence to the International Committee of the Red Cross on February 15 and continues to demand clarification of their status under the Third Geneva Convention.

The pilots' fate adds another layer of friction to an already volatile diplomatic situation, potentially complicating any future negotiation track between Tehran and Washington.

This article is for informational purposes only and does not constitute investment advice.