A potential agreement between the US and Iran to conclude the war and reopen the Strait of Hormuz could alleviate the global energy crisis, though it may take months for oil prices and supplies to stabilize as shipping resumes and infrastructure is restored.
The United States and Iran revealed on Sunday that they had reached a preliminary deal to end their conflict, sparking optimism that the energy crisis affecting nations worldwide since the war began could come to an end.
"Vessels of the globe, ignite your engines. Allow the oil to flow!" President Donald Trump wrote in a social media post celebrating the US-Iran agreement.
The deal would reopen the Strait of Hormuz once both parties formally sign the accord on Friday.
This narrow waterway is a vital corridor for global energy trade, typically handling roughly one-fifth of the world's oil and natural gas.
Tehran has effectively blocked shipping through the strait since the conflict erupted on February 28, 2026, triggering one of the most severe global oil-supply disruptions in history.
At that time, many predicted prices would surge from around $72 (€62) per barrel on February 27 to as high as $150 to $200.
Ultimately, the price increase was more restrained, with a barrel of oil peaking at about $120 shortly after the conflict began before declining.
After the US-Iran peace deal was announced over the weekend, the price dropped further.
Demand destruction kept prices under control
Increased supply from the US and other non-Gulf sources, reduced Chinese demand, coordinated releases of strategic reserves, and market optimism that the conflict would conclude quickly helped limit the price rise.
For instance, the US boosted crude oil exports in April and May to over five million barrels per day, up from an average of roughly four million barrels per day in recent years, as reported by the Wall Street Journal.
Meanwhile, China has drastically cut its crude oil imports in recent weeks, instead relying on existing commercial inventories and strategic stockpiles.
Fereidun Fesharaki, chairman emeritus of energy consultancy FGE NexantECA, recently told Bloomberg that the oil market had responded to the energy shock through demand destruction.
China, the world's largest crude importer, has reduced imports by four million barrels per day, he noted.
Emma Li, lead China oil market analyst at Vortexa, stated that China began tapping its vast domestic inventories in May to offset Middle East supply disruptions, rather than purchasing crude on the spot market.
This retreat from spot buying "significantly eased pressure on outright crude prices," she wrote in a research note at the end of May.
Global oil inventories are declining rapidly
China, however, is not alone, as countries worldwide have increasingly drawn on their domestic inventories to compensate for the millions of barrels of oil stranded in the Persian Gulf.
Oil stocks fell at an average rate of 5.3 million barrels per day between March and May, according to the US Energy Information Administration.
Industry experts have warned, though, that stocks are reaching critical levels.
"Buffers are becoming thinner," cautioned Jorge Leon, an analyst at Rystad Energy and a former OPEC official.
"Inventory draws and partial bypass options can provide some short-term relief, but they cannot fully offset a prolonged disruption to Strait of Hormuz flows," he told DW last week.
"In that case, it is not unthinkable that oil prices could rapidly climb to $150 per barrel this summer," Leon added.
Returning to normal will take months
With Washington and Tehran now reaching a deal and agreeing to quickly reopen the strait, there is widespread hope that the supply crunch will ease soon.
But even if this deal materializes, experts caution that it will likely take months before energy markets return to pre-conflict normalcy, pointing to the need for security measures such as clearing sea mines.
Shipping risks on the rise due to wars and trade crises
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Restoring traffic through the strait—with hundreds or even thousands of ships still stranded—and resolving issues such as insurance will also require time.
"Even if ships now have safe passage, tankers are in the wrong place, oil production/refining facilities need to get up to full capacity, and questions over the cost and availability of insurance for ships traversing the strait will remain," Neil Shearing, chief economist at Capital Economics, wrote in a research note.
"Our current working assumption is that ~80% of energy flows will resume by the end of Q3," he added.
Once the strait reopens, ensuring the free flow of traffic "might take eight weeks, perhaps longer, depending on how long each step takes," Neil Crosby, head of research at market intelligence firm Sparta Commodities, told DW earlier this month.
Restoring supplies will be a challenge
In addition to causing massive shipping problems, the conflict also resulted in damage to energy facilities across the Persian Gulf.
The damaged oil fields, pipelines, and other infrastructure will need repairs before they can contribute to boosting supply. Bringing the sites back online requires thorough inspections and can be a slow process.
Additionally, some energy producers in the region shut down production because they simply ran out of storage space.
Against this backdrop, it will likely take a while before energy supplies and prices stabilize.
"There's going to be a lot of wait and see on how quickly the strait really reopens and how long it's going to take for oil flows to really get back to normal," Nick Twidale, chief market strategist at ATFX Global in Sydney, told Reuters.
"It's certainly going to be months rather than weeks."
Edited by: Tim Rooks