economy
Strait of Hormuz reopening may take weeks to ease shipping backlog and oil pressure
The Strait of Hormuz is set to reopen after Iran and the U.S. sign a peace deal, but experts warn backlogs and security checks could delay normal shipping.
TL;DR
- A deal between the U.S. and Iran has led to the reopening of the Strait of Hormuz.
- Clearing the backlog of ships and restoring full oil supply is expected to take weeks, possibly months.
- Unresolved logistical and security issues, including permissions, charges, and mine clearance, complicate the restart.
- A phased restart is the most likely scenario, involving Iran and Oman in traffic management.
- Prioritization of oil tankers and LNG carriers is expected, potentially causing longer delays for other cargo.
- War-risk insurers must reinstate coverage, and naval forces need to certify safe transit corridors.
- The process of mine clearance could be slow, requiring careful coordination between Iran and the U.S.
- Past experiences, like in the Red Sea, suggest operators may remain cautious even after de-escalatory signals.
- Goldman Sachs has reduced its oil price forecasts following the announcement of the deal.