The war in the Middle East may be coming to an end, but one of the largest energy blackouts in history will still take some time to resolve.
On Sunday, the United States and Iran announced a memorandum of understanding to end their conflict that has been ongoing since February. The tentative deal– the official signing is scheduled for Friday – includes a provision to reopen the Strait of Hormuz so that oil and natural gas produced in the Middle East can once again be transported around the world.
But energy analysts warn that physical energy markets could remain tight well into next year. The strait has been effectively closed to commercial traffic for months, resulting in what the International Energy Agency called a ” largest oil market disruption in history. Repairing these cracks and replenishing global stocks will likely require more time and effort than signing a contract.
In one Research report Published on Monday, analysts at S&P Global wrote that while the deal eases concerns about long-term oil supplies, normalization of flows will likely take until the summer of 2027 and physical crude markets are expected to remain tight throughout the summer. S&P said supply losses are expected to exceed 1.5 billion barrels by the end of June.
In announcing the framework agreement, President Donald Trump wrote in a social media post that the strait would reopen “free of charge” and that the United States would lift its naval blockade of Iranian ports. But despite the announcement, traffic remained subdued until details of the deal emerged. A BBC analysisThe study published Tuesday found that only seven ships had transited the strait since the deal was announced, while nearly 600 tankers and cargo ships were largely idle in the Persian Gulf.
It may take some time before ships feel they can safely traverse the strait. “Transit through the Strait will remain riskier and more costly than before the war,” researchers at Oxford Economics wrote in a study note Published Monday. “Physical flows are still likely to recover gradually rather than immediately, even as prices react more quickly to signs that a credible reopening contract is in place.”
The researchers wrote that shipping problems, high insurance costs and operational caution are likely to be the biggest obstacles going forward, even if oil production capacity quickly returns to prewar levels.
Obstacles also remain on the supply side. In one note In the study published May 29, analysts at energy consultancy Wood Mackenzie laid out the reasons why, even in the best-case scenario, it will take time for production to return to normal. An immediate reopening of the strait, they wrote, would result in oil fields returning to 70% of previous production within three months and 90% within six months. However, the final tranche – worth around 1 million barrels of production per day – will take significantly longer, largely due to infrastructural repairs.
Among key Gulf exporters, Saudi Arabia and the United Arab Emirates are expected to recover at the faster end of the range, as they have high-quality storage and infrastructure as well as existing export pipeline capacity that can bypass the strait. A slower recovery is expected in countries with aging infrastructure, such as Iraq.
Other research reached a similar conclusion: most operational capacity could recover in the coming months assuming future outbreaks are avoided, although a full return to prewar production levels will likely take longer. Capital Economics estimated Monday that about 80% of energy flows could resume by the third quarter of 2026, but a return to “normal” would not occur until 2027.