The US and Iran recently announced an agreement to end over three months of conflict. However, analysts caution that oil and gas prices and energy supply issues will not resolve immediately. Businesses require time to ensure the safety of transit through the Strait of Hormuz, a critical shipping lane for about 20% of global oil and gas supply. Furthermore, the processes of transportation and refining are inherently slow, meaning it could take many months for energy flows to fully recover.
"It will take time for people to feel secure, for insurance operations to resume, and for personnel to return to sites to restart infrastructure," said Daniel Evans, director of fuel and refining research at S&P Global Energy.
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Cargo ships in the Persian Gulf, near the Strait of Hormuz, on 11/3. Photo: Reuters |
Cargo ships in the Persian Gulf, near the Strait of Hormuz, on 11/3. Photo: Reuters
Evans also noted that oil tankers move slowly, and it can take many months to transport oil from Hormuz to distant markets, process it in refineries, and then distribute it to consumers.
Some Middle Eastern oil producers also face delays, having halted extraction due to full storage capacity. Restarting these operations will take time. Daniel Sternoff, a senior expert at Columbia University's Center on Global Energy Policy, believes that countries that have stopped oil extraction will not want to resume production until they are certain that transit through the Strait of Hormuz is stable and the ceasefire can last longer than 30 or 60 days.
"We still do not know exactly what 'opening up' means, nor how quickly the backlog of goods will be released," he said.
Tamas Varga, an analyst at PVM Oil Associates, estimates that fully restoring transit through Hormuz will take several weeks to several months. "The slow resumption could lead to supply shortages throughout 2026," he warned.
Following the announcement of the US-Iran agreement, oil prices fell more than 4 USD per barrel during Monday's (15/6) session. Brent and WTI crude traded around 82,63 USD and 80 USD per barrel, respectively. However, these prices remain significantly higher than the approximately 70 USD per barrel seen before the conflict.
"Financial investors are simply borrowing future oil supply, which is why oil prices are currently falling," Tamas Varga explained.
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Brent oil price movements from 9/6 to 15/6. Chart: OilPrice |
Brent oil price movements from 9/6 to 15/6. Chart: OilPrice
As prices gradually cool, stranded oil tankers will need to clear the Strait of Hormuz before new ships can enter to load cargo, according to Evans. "To bring in a new ship, you have to ensure there is enough time for it to safely dock, load, and depart," he stated.
Alan Gelder, senior vice president of refining, chemicals, and oil markets at consulting firm Wood Mackenzie, suggests that Saudi Arabia and the UAE may restore production fastest. This is due to their alternative pipelines and export routes that bypass the Strait of Hormuz.
"However, places like Iraq will face more difficulties because they have cut significant production, and their oil fields are more complex. It could take about one year for them to return to normal levels," he commented.
Investments in energy systems have largely stalled since Hormuz was blockaded. This capital flow also needs time to restart, Gelder noted.
Investors are closely monitoring the flow of ships entering the Strait of Hormuz, as well as the pace of production and export recovery by Middle Eastern oil producers, after the damage caused by the conflict.
"The losses that have occurred cannot be reversed overnight. This includes not only physical damage to oil and gas infrastructure but also the economic pressures borne by oil-importing nations after months of facing high energy costs," commented Priyanka Sachdeva, senior market analyst at Phillip Nova.
Phien An (according to AP, Reuters)
