Hormuz reopening unlikely to restore oil flows immediately – Firstpost

The prospect of the Strait of Hormuz reopening under a newly announced US-Iran agreement has boosted market sentiment and eased fears of a prolonged energy shock, but shipping and energy analysts warn that restoring normal oil flows through the strategic waterway could take weeks rather than days.

US President Donald Trump said on Sunday that the US and Iran had agreed to gradually
reopen the Strait of Hormuz, ending months of disruption that choked one of the world’s most important energy corridors.

Under the proposed arrangement, Iran would remove mines from the waterway and refrain from imposing tolls on shipping, while the United States would lift the naval blockade it imposed around Iranian ports.

“I hereby fully authorize the toll-free opening of the Strait of Hormuz, and, simultaneously herewith, authorize the immediate removal of the United States Naval blockade. Ships of the World, start your engines.” Trump wrote on social media.

Hundreds of ships await clearance

Yet despite the breakthrough, industry experts say the route faces a lengthy recovery process after more than three months of conflict severely disrupted maritime traffic.

According to shipping industry estimates, roughly 500 merchant vessels remain stranded in the Gulf, creating a significant backlog that could take weeks to clear even if transit resumes immediately, the Financial Times reported.

Before the conflict erupted in late February, around 130 ships passed through the Strait of Hormuz each day. The waterway, which carries about a fifth of global oil trade and serves as the main export route for Gulf crude producers and Qatar’s liquefied natural gas shipments, has since seen traffic collapse following attacks on commercial vessels and concerns over crew safety.

A typical commercial transit through the strait takes about eight hours, meaning authorities and shipping companies will need to carefully manage vessel movements to avoid dangerous congestion.

According to the Financial Times, Major maritime organisations, including the International Chamber of Shipping and Bimco, have already warned shipowners that a sudden surge of vessels attempting to pass through the narrow waterway could create navigational risks.

Security concerns remain

The security environment also remains fragile.

Shipping industry estimates suggest that 46 vessels have been attacked since the conflict began, while Iran has seized two container ships. Reports of naval mines in the strait have further unnerved shipowners, particularly after US forces accused Iranian boats of laying mines in the area last month.

European naval forces, including the UK Navy, are preparing mine-clearing operations, but analysts say confidence among commercial operators may take considerably longer to rebuild.

Questions over the deal’s durability

The uncertainty surrounding the deal itself adds another layer of risk.

While Vice-President JD Vance said the agreement contains provisions aimed at preventing Iran from obtaining a nuclear weapon, many details remain unclear. Tehran has indicated that final negotiations will take place only after certain commitments by Washington are implemented, leaving questions about the timeline and durability of the accord.

There are also concerns that renewed military action elsewhere in the region could undermine the fragile understanding. Trump publicly criticised Israeli Prime Minister Benjamin Netanyahu over recent military operations that he feared could jeopardise the agreement before its formal signing.

Markets welcome breakthrough, but caution persists

For now, financial markets have welcomed the prospect of renewed oil flows. Crude prices fell sharply on Monday, while Asian stock markets rallied on hopes that a prolonged disruption to global energy supplies may be avoided.

However, analysts caution that reopening the Strait of Hormuz is only the first step. The process of clearing hundreds of stranded ships, removing security threats and rebuilding confidence among shipowners means that normal oil and gas exports are unlikely to return overnight.

For energy markets and consumers hoping for immediate relief from higher fuel costs, the message from industry experts is clear: the reopening may happen soon, but a full recovery will take considerably longer.

With inputs from agencies.