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US–Iran peace negotiations have stumbled, but if normalcy returns to the Strait of Hormuz, the G7 must be ready to align again on pressuring Russia.

The status of the Strait of Hormuz and ongoing peace talks between the US and Iran continue to dominate the headlines. The signing of the Memorandum of Understanding signalled that negotiations were inching towards a settlement that could reopen the Strait of Hormuz and restore a degree of normality to global shipping and energy markets. Optimism remained fragile and the US and Iran have exchanged renewed strikes, and Iran may close the waterway once again. Under such uncertainty, markets will take time to settle and traffic will resume slowly under continued high risk premiums.

In return for reopening the Strait, the 14-point memorandum presented contentious promises beyond the ceasing of hostilities, such as the full lifting of US and UN sanctions on Iran, access to its blocked funds in US and foreign escrow accounts, a $300 billion reconstruction fund, and a UN Security Council resolution endorsing these points.

While the situation is still volatile, bringing an end to the crisis seems a priority for President Trump and a potential resolution will bring about the possibility of reviving one of the biggest casualties of the conflict: international pressure on Russia.

The focus on Iran under the US maximum-pressure strategy had a direct impact on the European priority of constraining Russia’s revenue from its energy exports. International efforts struggled as the new US Administration shifted attention away from Russia in early 2025 and turned towards Venezuela and Iran. Since January last year, the US has not adopted a single designation against the Russian shadow fleet. Two major sanctions were adopted against Russian oil infrastructure with the targeting of Lukoil and Rosneft in October, perhaps the single most impactful measure of the year, but any further disruption of its shadow fleet operations would stem solely from designating or seizing vessels that traded in Venezuelan and Iranian oil that also had links to Russia.

The US bombing campaign under Operation Epic Fury was matched by the raft of sanctions adopted under Economic Fury against the commercial infrastructure behind Iran’s oil exports

Despite the transatlantic divergence, sanctions on Russian oil had started to bite. By December 2025, Urals prices fell below $50 per barrel and Russia’s fossil fuel export revenues reached their lowest post-invasion levels. However, just as Moscow was feeling the pressure, the war with Iran dynamited the market with steep oil price hikes, which the US sought to mitigate with general licences to service Russian oil, generating billions in revenue for the Kremlin and its war machine. As pressure on Iran may start to ease, restrictions on Russia should be tightened once again.

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