Peace with Iran Offers Hope, But Oil Market Chaos May Linger

Despite U.S. President Donald Trump's declaration that peace with Iran is 'within reach' and the potential reopening of the Strait of Hormuz, international markets are exercising caution. After months of optimistic statements and failed negotiations, investors are seeking tangible proof that an agreement is feasible and that maritime traffic through this critical energy corridor can resume normal operations.

During the recent conflict, Iran strategically utilized the Strait of Hormuz, a route through which approximately one-fifth of the world's oil passes. Using speedboats, naval mines, and drones, Tehran disrupted oil transport. Even if the conflict were to end immediately, the economic and logistical repercussions could persist for months or even years.

The immediate challenge is unblocking maritime traffic. According to the analysis firm Kpler, around 166 oil tankers, carrying approximately 170 million barrels of oil, are currently stranded in the Persian Gulf. These vessels must depart before empty tankers can enter to load cargo. Experts estimate that restoring normal transit capacity could take up to three months.

Following the clearance of these stranded tankers, the next phase involves reducing the substantial oil stockpiles accumulated during the conflict. Although refineries have not fully replenished their reserves, which might partially expedite activity resumption, high inventory levels will continue to slow the return to maximum production capacity. Furthermore, restarting oil extraction poses another significant hurdle, as Middle Eastern oil wells cannot be instantly reactivated. The complex engineering process required to bring them back online can take weeks, with production needing to be gradually increased to avoid damaging the reservoirs. Coordination among regional oil companies and states is also crucial, given the interconnected nature of many oil fields.

Adding to the complexity, the conflict has damaged critical infrastructure, including refineries, natural gas facilities, and oil installations. Some repairs are projected to take years, according to energy companies. The situation highlights the intricate and lengthy process required to stabilize the global oil market, even if diplomatic tensions ease.