US-Iran Ceasefire Opens Hormuz, But Oil Supply Recovery Likely to Take Months
US President Donald Trump announced a two-week ceasefire with Iran, triggering the reopening of the Strait of Hormuz.
The chokepoint carries nearly 20 percent of global oil supply, making the development critical for global markets.
However, analysts warn that despite the truce, a full recovery of oil flows and prices could take several months.
The ceasefire between the United States and Iran has brought immediate relief to global energy markets, with both sides confirming safe passage through the Strait of Hormuz. Iranian Foreign Minister Seyed Abbas Araghchi stated that coordinated access through the route would be ensured for two weeks.
While the announcement triggered optimism, experts caution that restoring normal supply chains will be a gradual process.
Oil prices dropped sharply by around 13–15 percent following the ceasefire announcement, reflecting reduced fears of immediate disruption. However, prices remain significantly higher than pre-war levels.
Analysts say tanker operators are unlikely to resume full-scale operations immediately due to lingering security risks. As economist Joe Brusuelas noted, confidence-building measures will be essential before normal shipping volumes can return.
Additionally, insurance coverage for oil tankers remains uncertain, depending on conditions set by Iran, which are yet to be clarified.
The recent US-Iran conflict caused one of the largest disruptions in global oil markets, forcing Persian Gulf producers to cut output by millions of barrels per day. The Strait of Hormuz became the focal point, with shipping routes halted and energy infrastructure damaged.
The crisis also impacted liquefied natural gas facilities, particularly in Qatar, where repairs could take years in some cases.
Despite the reopening of Hormuz, experts estimate it could take three to six months to restore oil production and refining levels fully. Restarting damaged oil fields and facilities is a complex engineering process that cannot be completed quickly.
Fuel prices may begin to ease within one to two weeks if the ceasefire holds, but full normalisation of global energy markets will likely take much longer.
Even the aviation sector is expected to face prolonged challenges. According to International Air Transport Association Director-General Willie Walsh, jet fuel supply chains and pricing may remain unstable for months.
Our Final Thoughts
The US-Iran ceasefire has undoubtedly reduced immediate fears of a global energy crisis, but the path to recovery remains uncertain and slow. While the reopening of the Strait of Hormuz is a critical step, rebuilding trust among shipping operators, restoring damaged infrastructure, and stabilising production levels will take time. Markets have reacted positively in the short term, but structural challenges persist beneath the surface. The coming weeks will be crucial in determining whether this ceasefire can evolve into a longer-term resolution or if volatility will continue to define global energy dynamics. For now, cautious optimism appears to be the dominant sentiment across markets and policymakers alike.