The war in the Middle East might be drawing to a close, but one of the largest energy disruptions in history still needs some time to iron out the kinks.
On Sunday, the U.S. and Iran announced a memorandum of understanding to end their conflict that has been waged on and off since February. The tentative deal—scheduled to be formally signed Friday—includes a provision to reopen the Strait of Hormuz, allowing Middle East-produced oil and natural gas to ship around the world again.
But energy analysts warn that physical energy markets could remain tight well into next year. The strait has been effectively closed to commercial traffic for months, sparking what the International Energy Agency has called the largest oil market disruption in history. Repairing those cracks and resupplying global stocks will likely take more time and effort than signing a deal.
In a research brief published Monday, analysts at S&P Global wrote that while the deal eases long-term oil supply concerns, normalization of flows is likely to take until the summer of 2027, with physical crude markets expected to remain tight throughout this summer. Supply losses are expected to exceed 1.5 billion barrels by the end of June, according to S&P.
