Oil flows through the Strait of Hormuz are expected to recover gradually following a U.S.-Iran ceasefire, with logistical constraints, geopolitical risks, and a significant backlog of stranded crude identified as key limiting factors.

Recovery Timeline and Constraints

While the ceasefire has eased immediate concerns, a full resumption of flows remains limited. Normalization is likely to take several weeks even under an improving scenario. A backlog of an estimated 136 million barrels of crude and refined products stranded in the Gulf will take time to clear. The pace of recovery will depend on tanker movements, with inbound ballast vessels serving as a key signal of stabilizing activity. Operator risk appetite, rather than insurance availability, is seen as the primary near-term constraint.

Phased Recovery and Supporting Infrastructure

Once flows resume, a phased recovery is expected. Initial shipment increases could occur within two to four weeks, followed by a further ramp-up toward more normal levels over an additional two to four weeks, assuming ceasefire conditions hold. Onshore storage may help offset delays in upstream restarts, though some oilfields may face challenges returning to full production. In parallel, regional refining operations are recovering from outages.

Refining Capacity and Market Adaptation

Approximately 2 million barrels per day (MMbpd) of Middle East refining capacity has been shut in due to damage, with an estimated 80% potentially returning within two months, followed by additional stabilization time. Meanwhile, up to 3 MMbpd of reduced refining runs, primarily in Asia, could normalize within one to two weeks after crude flows resume. Analysts note that a "new normal" for Hormuz transit cannot be ruled out, including the potential for Iran to exert greater control through mechanisms like a tiered system with preferential access for certain countries. The global oil trade has previously adapted to similar sanctions and disruptions.

Ongoing Risks and Uncertain Outlook

Despite the ceasefire, the situation remains fluid. Ongoing regional tensions, unresolved political issues, and operational risks continue to cloud the outlook, leaving the pace and stability of a full recovery in global energy flows uncertain.