Source: Fortune
Summary
Energy experts say that despite an agreement to end the Iran war and open the Strait of Hormuz, high oil and gasoline prices and energy supply problems won’t be solved overnight. It will likely take months for energy companies to resume operations and meet global demand. Ships loaded with crude oil have been stranded in the Persian Gulf for over three months, and the slow pace of shipping and refining crude oil, as well as security concerns, will delay the recovery.
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Energy companies are cautioning that it will take time to feel comfortable and for insurance to be in place to restart operations. Ships will need to exit the strait, new tankers will need to come in, and oil tankers move slowly. Restarting paused oil extraction operations can also be a slow process. Countries like Saudi Arabia and the UAE may be quicker to resume production, but others like Iraq may take about a year. The agreement to end the Iran war and open the Strait of Hormuz is just the first step in a long process to normalize energy supplies.
The announcement sounds like a “return to normal” but in reality, it’s just a “return to waiting”.
Author: Evan Null
