Oil prices fell in a week, but the signing of a peace deal is delayed due to internal divisions in Iran

August Brent crude futures closed at a 5-week low of $91/barrel on Friday, losing 9.9% for the week under pressure from news of progress in negotiations between the US and Iran, but this morning at the opening of trading on Asian markets, quotes rose again on information about the resignation of the Iranian president and a possible breakdown of the agreements.

The previously agreed agreement provided for a 60-day cessation of hostilities, free passage of ships through the Strait of Hormuz, and an obligation for Iran to remove the mines it had placed within 30 days. At the same time, the US should end the blockade of Iranian ports, but not immediately, but in proportion to the restoration of ship traffic through the strait. The fate of Iran's frozen reserves and the lifting of sanctions will be discussed separately from the unblocking of the strait.

At least two non-Iranian supertankers passed through the Strait of Hormuz on May 27, marking a new movement of energy through the key waterway.

According to Iran International, yesterday, Iranian President Pezeshkian submitted an official resignation letter to the Office of the Supreme Leader, emphasizing that the president and the government have been effectively excluded from important decision-making processes in the country, and the IRGC has taken control of matters, so under such circumstances the president cannot fulfill his legal duties, and asks to immediately accept his resignation.

In Iran, real power is in the hands of the mid-level IRGC, an influential group of conservative politicians and clerics who have been obstructing the efforts of the Iranian President, the Speaker of Parliament, and the Foreign Minister to reach an agreement with the United States for weeks. Opponents of the deal are pressuring the negotiators through rallies and state television. At rallies in Tehran, they are demanding that the fight against the United States and Israel continue, not that they make concessions.

As reported by the US Central Command, over the weekend the Gambian-flagged dry cargo ship Lian Star ignored more than 20 warnings from the US military about the ban on entry to the Iranian port, so it was fired upon with a missile, which led to the ship's stoppage.

The disruptions in Gulf supplies have reduced global crude inventories by nearly 500 million barrels, and could reach a billion barrels by June. Gulf oil producers have been forced to cut output by about 6% due to the closure of the Strait of Hormuz, as local storage facilities are full due to the halt in exports.

The market supported the Vortexa report, according to which crude oil stocks on tankers idle for at least 7 days decreased by 18% to 87.05 million barrels during May 16-22, indicating active unloading of sanctioned tankers that had been idle for some time.

The economic situation in Iran continues to deteriorate, so the split in the ruling elites will intensify and lead the country to civil war if agreements are not signed and food supplies and oil exports are not restored. In this situation, it is easier for the US to tighten the economic “noose” around Iran than to launch new military attacks that will increase the risks of damage to the region’s oil infrastructure.