Worst Hormuz Re-blockade...? The Real Reason for the Breakdown in Negotiations | Professor Park Hyun-do, Professor Sung Il-kwang, Sogang University Euro-MENA Institute

Summary

Two professors from Sogang University's Euro-MENA Institute discuss the breakdown of the US-Iran ceasefire negotiations. They argue that control over the Strait of Hormuz, not nuclear issues, is the real dealbreaker. Iran's IRGC views the strait as its last financial lifeline and will not give up control, while the US insists on free passage. Both sides lack trust, and the professors expect a prolonged new normal of low-intensity attacks accompanied by diplomatic talks, with oil prices likely to rise further as disruptions continue.

• The US-Iran ceasefire (MO) effectively collapsed over the Strait of Hormuz, not nuclear talks.
• Iran insists on managing ship transits and collecting tolls; the US demands unconditional free passage.
• Iran's IRGC sees Hormuz control as its ultimate fallback revenue source and refuses to concede.
• Mutual distrust runs deep, preventing progress even to the nuclear discussion stage.
• The professors expect a prolonged new normal of intermittent military strikes and ongoing negotiations.
• Oil prices (WTI) have already risen to the mid-$70s and could spike further on escalation.
• US strategic petroleum reserves are historically low, reducing the ability to offset supply shocks.
• South Korea and other Asian oil importers are highly vulnerable to the resulting price volatility.