Global energy consultancy Rystad Energy has described the newly signed Memorandum of Understanding (MOU) between the United States and Iran as a significant de-escalation of tensions rather than a lasting resolution, warning that geopolitical risks in global oil markets remain elevated despite the breakthrough.

In a fresh assessment released by the firm’s Head of Geopolitical Analysis, Jorge Leon, Rystad said the agreement reduces the likelihood of an immediate military confrontation but does not address the deeper issues surrounding Iran’s nuclear program and the long-term security of the Strait of Hormuz, which remain subject to a 60-day negotiation process.

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“The US-Iran MOU is an important de-escalation, but it is not a resolution, and markets should not price it as one,” Leon said.

According to the consultancy, both Washington and Tehran had strong incentives to step back from direct confrontation. The United States sought to avoid a surge in domestic fuel prices ahead of midterm elections, while Iran needed relief from economic sanctions. The resulting agreement, Rystad noted, addresses those immediate concerns while postponing the most difficult political and security questions.

For energy markets, the development marks a transition from acute disruption risk to what the company describes as “managed geopolitical risk.” While the threat of an immediate military breakdown has diminished considerably, Rystad cautioned that the geopolitical risk premium embedded in oil prices is unlikely to disappear.

The consultancy’s updated outlook assigns a 55 per cent probability to what it calls a “narrow deal” scenario, up from 40 per cent in its previous assessment. Under this outcome, negotiations produce enough progress to prevent renewed fighting and allow a meaningful recovery in oil flows through the Strait of Hormuz, although not enough to eliminate the strategic rivalry between the two sides.

Rystad projects that under such a scenario, sanctions on Iran would gradually ease and crude flows through the vital waterway could recover to approximately 10 million barrels per day by January 2027. However, a residual geopolitical risk premium of between $5 and $10 per barrel would likely persist because the agreement would not fully remove the possibility of future disruptions.

The firm’s analysts said this remains the most politically feasible outcome because it allows Washington to point to improved oil market stability while enabling Tehran to retain some leverage over one of the world’s most important oil transit routes.

A comprehensive settlement, meanwhile, is viewed as increasingly unlikely. Rystad reduced the probability of a full-resolution scenario to 10 per cent from 25 per cent previously, arguing that reaching a broad agreement covering both Iran’s nuclear program and a durable reopening of the Strait within 60 days would be extremely challenging.

In that optimistic scenario, flows through the Strait could rise to around 14 million barrels per day by January, sanctions would be lifted, and most of the geopolitical risk premium would disappear. However, the company said such an outcome would require rapid diplomatic progress on issues that have remained unresolved for months.

The consultancy also sees a 25 per cent probability that negotiations could drift into a prolonged stalemate. Under this scenario, no comprehensive deal would emerge, but both parties would continue to avoid direct conflict while extending the ceasefire arrangement.

Rystad said a stalemate could result from Washington deciding that stabilized oil prices are sufficient to meet its objectives, or from Tehran concluding that prolonging negotiations allows it to preserve leverage and extract concessions without making binding commitments on either the nuclear issue or the Strait of Hormuz.

Should this occur, oil flows through the waterway would recover only partially, reaching about 5 million barrels per day by late 2026, while an additional 5 million barrels per day would be rerouted through alternative channels. Market uncertainty would remain high, sanctions would stay in place, and oil prices would likely continue carrying a geopolitical premium of around $10 per barrel.

Although the possibility of renewed conflict remains, Rystad has lowered the probability of that outcome to 10 per cent, down from 25 per cent in its earlier forecast. A breakdown in negotiations and a return to military action would severely constrain oil flows and could add between $15 and $20 per barrel to crude prices.

The consultancy argues that both sides currently have limited incentives to resume hostilities. The initial phase of the conflict allowed Washington and Tehran to demonstrate resolve and strengthen their negotiating positions, while a return to open warfare would expose both countries to significant political, economic and military costs.

Looking beyond the immediate negotiations, Rystad said the critical issue for markets is whether Iran retains the ability to influence, disrupt or threaten shipping through the Strait of Hormuz once the current negotiation period ends. If such leverage remains, oil traders are likely to continue pricing a structural geopolitical premium into global crude markets even if physical supply flows improve.

The firm also expects any recovery in maritime traffic to be gradual. Shipowners will require time to regain confidence, insurance costs must normalize, and logistical bottlenecks created during the crisis will need to be cleared. At the same time, efforts by governments and companies to replenish commercial inventories and strategic petroleum reserves could add further upward pressure on oil prices.

As a result, Rystad concluded that while the MOU significantly lowers the risk of an immediate oil shock, it does not eliminate uncertainty. Instead, the market is moving from crisis-driven pricing to negotiation-driven pricing, with reduced panic but continued volatility as investors assess the outcome of the coming diplomatic talks.