Even with a deal to reopen the Strait of Hormuz, it could take weeks or months for oil to fully flow
Summary
A tentative deal has been made to end the war in Iran and reopen the Strait of Hormuz, a key passage for global oil shipments. However, it may take weeks or months before oil flow returns to normal, as ships need time to pass through, and producers must ramp up oil production.Key Facts
- The Strait of Hormuz carries about one-fifth of the world’s crude oil before the war.
- Hundreds of oil tankers are currently trapped inside the Persian Gulf, waiting to exit through the narrow strait.
- Oil producers in the Gulf reduced output during the war, and it will take time to increase production again.
- Ship operators may delay passing through the strait until they feel it is safe and cleared of mines.
- Shipping a tanker to major Asian customers like Japan and back can take 45 to 50 days.
- Mine clearance in the strait could take about six months to ensure safe navigation.
- About 500 commercial vessels remain stuck in the Persian Gulf.
- Iran has demanded the right to collect fees from ships passing through the strait, but details of this are unclear.
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