Global Oil Markets Brace for a Prolonged Recovery as the Strait of Hormuz Reopens
The United States and Iran have signed a memorandum of understanding that reopens the Strait of Hormuz to commercial shipping, ending three months of unprecedented blockage. While the physical corridor is now clear, analysts warn that the shockwaves through the oil market will persist for months, if not a full year, as the industry works to replenish depleted reserves and normalize supply chains.
Key Takeaways
- MoU clears the waterway: The U.S.–Iran agreement restores free passage for oil tankers beginning Friday.
- Massive supply loss: The three‑month closure eliminated roughly 2 billion barrels of crude from the global market.
- Reserve drawdowns: Nations tapped strategic petroleum reserves and imposed rationing to offset the shortfall.
- Lingering price pressure: Even with the strait open, tight inventories mean oil prices are likely to remain volatile.
- Year‑long recovery horizon: Restoring pre‑closure flow levels and market confidence is projected to take up to twelve months.
- Strategic implications: The episode underscores the geopolitical fragility of chokepoints in global energy logistics.
