Markets have welcomed the US-Iran peace deal that will reopen the Strait of Hormuz, but analysts warn that oil and gas prices are unlikely to return to pre-crisis levels for months. Brent crude tumbled to $82 a barrel after the announcement, yet remains well above last year’s average of $69, while wholesale gas prices fell about 6%.
The deal comes weeks before the oil market was expected to enter a ‘red zone’ of soaring summer demand and depleted crude stockpiles. However, a return to normality relies on Iranian cooperation and the practicalities of clearing mines, which could take up to seven weeks. Even then, prices may stay between $80 and $90 per barrel for the rest of the year as buyers race to refill strategic reserves.
About 160 oil tankers remain stranded in the Gulf after more than 100 days of disruption. Insurers remain cautious, and production and refining facilities need time to ramp up. Analysts estimate that 80% of crude flows could resume by the end of the third quarter, but gas exports face greater hurdles.
Qatar’s Ras Laffan LNG complex, damaged by Iranian drone strikes, may take years to return to full capacity, removing 20% of global LNG supply. Fertiliser shipments are likely to be deprioritised as oil and LNG carriers take precedence once normal traffic resumes.
