If the war’s over, when does everything go back to normal?

If the war’s over, when does everything go back to normal?

Iran’s decision to open the Strait of Hormuz marks a significant milestone for the Middle East conflict and global economic stability. However, the path to restored normalcy is far from straightforward. While the immediate threat of blockades may ease, the timeline for oil prices to stabilize remains uncertain. Experts suggest that pre-war levels might not be reached in the near future, possibly extending beyond the current year.

The Road to Normalcy: A Multi-Step Process

The reopening of the strait brings relief, but logistical hurdles persist. First, the 128 tankers stranded in the region must clear out, transporting approximately 160 million barrels of oil. This process could take up to three months, according to Victoria Grabenwöger of Kpler, as empty vessels replace them and refuel. Next, oil stockpiles need to be reduced. Producers had accumulated excess reserves during the crisis, but refiners managed storage efficiently, which may shorten the recovery time.

“Do not expect a return to pre-war prices,” Joe Brusuelas, chief economist at RSM US, told CNN. “The process will require time, coordination, and adjustments across the supply chain.”

Restoring full production capacity is another challenge. During the conflict, many Middle Eastern oil wells were temporarily shut down. Restarting operations involves complex engineering, balancing water and gas injection levels, and ensuring reservoir integrity. This step alone could take weeks, with careful pacing to prevent damage. Meanwhile, critical infrastructure damage may require years of repairs, as highlighted by industry analysts.

Uncertainty Lingers: Peace or Pretext?

Despite recent progress, doubts remain about the durability of the truce. Traders have been cautious, keeping prices elevated due to fears of renewed disruptions. Even with oil dropping over 8% on Friday, Brent crude prices remain above $90—$20 higher than pre-war levels. The success of the agreement hinges on Iran’s commitment to maintaining the open strait and whether the U.S. administration will lift its oil blockade as a condition for peace.

Shipping companies also face hesitancy. Insurance premiums have surged, and operators may demand additional safety measures, such as naval escorts, before resuming full traffic. Hapag-Lloyd, a German firm, noted that vessels could begin testing the waters soon to confirm operational safety. Yet, the war’s end is not guaranteed, leaving the global economy in a state of cautious anticipation.