The opinions expressed here are those of the author, a columnist for Reuters.

By Ron Bousso

June 29 (Reuters) -

Breaking down what matters today in global energy markets

By Ron Bousso, ROI Energy Columnist

Perhaps we should be used to this by now. Just when it seems like events in the Middle East are taking a step or two forward, they take a step back. Nothing reflects this more than the United States and Iran’s current back-and-forth around the Strait of Hormuz.

Ship traffic through the narrow waterway picked up significantly last week, instilling confidence that the June 17 memorandum of understanding between the two parties would result in a permanent end to the war.

But the mood has soured since Thursday following a series of strikes and counter-strikes after an Iranian projectile hit a cargo vessel in the strait on Thursday. Both the U.S. and Iran have accused the ⁠other of breaking the interim ceasefire.

Keeping to his usual script, President Donald Trump responded to the tit-for-tat strikes by threatening the Islamic Republic with obliteration if it did not honour the agreement to end the war. Within hours, Iran and the United States agreed to halt hostilities and renew talks regarding their dispute.

It’s likely we’ll see this familiar dance repeatedly in the coming months as Washington and Tehran tussle over the agreement.

Energy shipping out of the Middle East dropped sharply amid the flare-up from 18 vessels on Thursday to just four on Sunday, according to LSEG data. But transits appeared to pick up on Monday.

Oil prices barely reacted to the renewed tensions, holding near pre-war levels of $73 a barrel. The slide might, at first glance, suggest business as usual has returned to the Gulf, the world’s most important oil and gas hub. But beneath the surface, the market is anything but orderly. More on this in my latest column.

In other news:

• China's latest five-year energy plan confirms two seemingly contradictory positions. It will continue to be the world's leader in both renewable energy and coal, explains ROI Asia Commodities Columnist Clyde Russell.

• The extreme heat wave that swept across Europe last week boosted demand for cooling systems while forcing utilities to scale back power production to avert outages. ROI Energy Transition Columnist Gavin Maguire provides a breakdown on how to track the fallout from the ongoing heatwave across Europe's power systems.

As ever, don’t hesitate to contact me at ron.bousso@thomsonreuters.com or follow me on LinkedIn with any questions or thoughts.

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Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

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