As the Iran war approaches 100 days on Sunday, a comforting but flawed assumption has taken hold.
Many policymakers, businesses and investors believe that a rapid reopening of the Strait of Hormuz will quickly bring down energy prices, once stranded oil and gas tankers can finally leave the Gulf.
Yet top oil executives, shipping sector leaders and economists are predicting the opposite. They caution that peace will not instantly return energy markets and global supply chains to normal. The fallout, they say, could last for many more months and even years.
Amin Nasser, CEO of Saudi Aramco, the Gulf's largest oil supplier, told investors last month that even if Hormuz reopened immediately, it would "take months for the market to rebalance." If the closure was sustained for even a few more weeks, Nasser said that "normalization will last into 2027."
Traffic through the narrow waterway between Iran and Oman remains at a fraction of normal levels, despite a fragile ceasefire and peace talks that have faced repeated setbacks.
Oil prices remain around roughly 30% above pre-war levels, keeping gasoline, diesel and fertilizer prices significantly elevated. These additional costs are pushing up global inflation, disrupting supply chains and raising food prices worldwide as fertilizer — often made from natural gas — becomes more expensive for farmers.
'Stop-start' Hormuz reopening predicted
TL;DR: Once a peace deal is reached, shipping firms must regain enough confidence to send crews back into the Gulf region, experts say.
Once a peace deal is reached, shipping firms must regain enough confidence to send crews back into the Gulf region, experts say. This could require an observation period of 30 to 45 days. Security arrangements, including international navy patrols, will also need to be in place to protect against any sporadic attacks on vessels.
Shipowners and crews remain deeply cautious because strikes on shipping in Hormuz continue, with multiple vessels hit last week alone, Chevron CEO Mike Wirth told Bloomberg on Friday, adding that reopening Hormuz would likely be a "stop and start" process.
"It only takes one attack on a ship to put the vast majority of them off," Neil Crosby, head of research at market intelligence firm Sparta Commodities, told DW, adding that shipping firms have replaced Gulf revenues from other voyages, so "why bother taking the risk?"
Lloyd's of London, the world’s leading marine insurance market, has seen war-risk premiums for Hormuz transits surge dramatically and remain elevated even after the ceasefire, which took effect on April 8.
Once Hormuz is safe, the many tankers already stranded inside the Gulf will also need to exit safely, while fresh vessels sail from distant ports — some halfway around the world — to load new cargoes.
"The process might take eight weeks, perhaps longer, depending on how long each step takes," warned Crosby.
Safety testing delays war-damaged facilities
TL;DR: Physical damage to Gulf energy infrastructure will add another major delay.
Physical damage to Gulf energy infrastructure will add another major delay. Dozens of oil fields, pipelines, refineries and liquefied natural gas (LNG) plants have been hit, with repair costs estimated in April at between $25 billion and $58 billion, according to consulting firm Rystad Energy.
The worst hit is Qatar's giant Ras Laffan complex, where Iranian strikes knocked out 17% of the country's LNG capacity. Qatari officials have warned that full repairs there could take three to five years to complete.
LNG producers could also spend years untangling contractual disputes over missed deliveries, with backlogs potentially affecting cargo schedules well into 2027, according to lawyers speaking to S&P Global's Platts, a leading energy and commodity price benchmark provider.
This includes contested "force majeure" claims — legal declarations that the war made it impossible to deliver LNG as promised.
Other energy facilities face weeks or months of work due to the need for thorough safety checks, complications from long production halts and replacement parts that were already in short supply before the war.
Gulf sites that have been offline since March have built up pressure, debris and potential corrosion that require thorough inspections and careful restarts to avoid accidents.
What's behind China's Strait of Hormuz bypass?
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Energy crunch worsens as buffers run dry
TL;DR: Crosby pointed to an "inventory problem" that could emerge by the summer, noting how other parts of the global oil market have been providing temporary relief to the lack of supply from the Gulf.
Crosby pointed to an "inventory problem" that could emerge by the summer, noting how other parts of the global oil market have been providing temporary relief to the lack of supply from the Gulf.
Since the war began, the United States has hiked oil production to record volumes, while China has cut its crude imports by 3.5 million barrels per day — relying more heavily on strategic reserves. IEA members have also drawn from their oil reserves.
These measures, however, cannot last. US oil stocks are set to hit dangerously low levels in the next few months, while China will need to resume imports soon, competing with the rest of the world for limited supplies.
The head of the International Energy Agency, Fatih Birol, warned last month that while a surplus of oil before the war helped absorb the initial shock, the oil market could enter a "red zone" in July or August due to depleting stocks.
"Once they [oil stocks] start to run dry, the only solution is higher prices because only with higher prices can you start to really destroy demand," Crosby told DW.
He hinted at prices potentially doubling and warned that this path would lead to a global recession.
Curated by Shiv Shakti Mishra
