AhlulBayt News Agency (ABNA): The drop in oil prices following the announcement of the framework agreement to end the U.S.-Zionist regime war against Iran initially appeared to signal a return to calm in the energy market. However, the rapid decline in prices in financial markets does not mean a return to pre-war conditions.
According to a report by Al Jazeera, estimates from oil companies, energy traders, and analysts indicate that restoring export flows, balancing inventories, rebuilding transport networks, reducing insurance costs, and fully resuming production could take months, and if the ceasefire holds, possibly a year or more.
Brent crude for August delivery fell below $80 per barrel on Wednesday, after U.S. President Donald Trump announced that the 106-day war had ended and called for the resumption of oil flows. However, energy and shipping companies do not consider this political development sufficient on its own to resume normal oil transit through the Gulf.
The Strait of Hormuz; The Main Chokepoint of the Energy Market
According to data from the U.S. Energy Information Administration, the Strait of Hormuz accounts for about one-quarter of the world's seaborne oil trade and nearly one-fifth of global consumption of oil, petroleum products, and natural gas.
Wael Sawan, CEO of Shell, believes the market may take about a year or more to rebalance. This is because the crisis was not only about the halt in transportation but also created problems in storage, production, the shipping fleet, and strategic reserves that will not be quickly resolved with a drop in oil prices.
The Problem Is Not Just Oil; It Is Confidence in the Transit Route
Analysts believe that the real return of oil exports will begin when empty tankers enter the region, after which loaded tankers can depart.
During the war against Iran, export storage tanks in the region became full, and before production can increase again, sufficient storage space must be created so that oil can flow from wells to ports without disruption.
However, the entry of ships into the Persian Gulf requires assurance that the main routes through the Strait of Hormuz are clear of potential mines and that tankers that had chosen alternative routes during the war return.
Amin Nasser, CEO of Saudi Aramco, described this problem as more related to the positioning and preparation of the global fleet rather than just an oil shortage.
Shipping Companies Are More Cautious Than Governments
Maritime transport companies are approaching the new conditions with greater caution.
Some executives of these companies have stated that they will only resume transit through the Strait of Hormuz when they are fully assured of the route's safety.
Alongside security, insurance costs remain a major obstacle. Insurance companies are still keeping war risk premiums at high levels. This figure, which for some international tankers reaches about 7.5 percent of the vessel's value, can create millions of dollars in additional costs per week.
Some energy institutions believe that the full recovery of commercial activity in the Strait of Hormuz may require 30 to 45 days of calm, the widespread return of insurance companies, and the restoration of a large portion of pre-war maritime traffic.
10,000 Oil Wells Taken Offline
Even if transportation and insurance problems are resolved, restoring oil production will also take time.
According to estimates by Rystad Energy, about 10,000 of the 36,000 active oil wells in the region before the war against Iran have now been taken offline.
Some of these wells require repairs due to pressure drops, wear, or technical issues.
Morgan Stanley has forecast that only 50 percent of the region's oil and gas production will return by September, and this figure may reach 80 percent by the end of this year.
This means that even after the end of the war against Iran, the energy market may face a relative supply shortage for months.
Damage to Energy Facilities; Reconstruction Takes Time
Damage inflicted on energy infrastructure also slows the recovery process.
Although some gas facilities can resume operations relatively quickly, damaged sections may require several years for full repair.
Some countries have also announced that the reconstruction of their main energy facilities will continue until next year.
Global Oil Reserves Came Under Pressure
Wael Sawan says that during the crisis, the world effectively borrowed from the future. This is because existing reserves were consumed to compensate for the shortfall in Middle Eastern oil.
Estimates suggest that about 1.2 billion barrels of oil were unproduced or unexported during the war, and if the recovery of production and transportation is slow, this figure could reach about 2 billion barrels by the end of the year.
Part of the market shock was contained by reduced activity at Asian refineries, China's use of domestic reserves, and the release of strategic reserves by the United States and Europe. However, this action has reduced the global energy system's capacity to cope with a new crisis.
Inflation Still Continues
European central banks view the end of the war as a relief of pressure, not a complete end to the crisis.
Economic officials have warned that increased energy costs may persist for some time, and their effects will remain in the prices of goods, services, and wages.
Some analysts believe that even with lower oil prices, the effects of the past months could still keep inflation high.
Changing the World Energy Map
Major energy companies believe that the war against Iran may alter the world energy map for a long time.
Producing countries in the Persian Gulf are seeking alternative routes for oil and gas transport to reduce their dependence on the Strait of Hormuz.
At the same time, importing countries in Asia and Europe are trying to diversify their energy sources.
Experts say the experience of the war against Iran has shown that dependence on a narrow and sensitive route carries heavy costs.
Restoring Confidence Is More Difficult than Restoring Oil
According to energy transport experts, the main issue is no longer just the amount of oil available, but the confidence of companies in the security of the transit route.
The experience of the Red Sea crisis has shown that even after tensions subside, the complete resumption of shipping may take a long time.
For this reason, the oil market is likely to first experience a price drop, followed by a slow and cautious return of trade, and ultimately conditions more volatile than those before the war against Iran.
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