Hormuz reopening lifts sentiment, but analysts see months before trade recovery

The US–Iran agreement to reopen the Strait of Hormuz has eased immediate fears of supply disruption, but analysts warn it will take months before global oil and gas trade flows normalise. 

The deal, reached after weeks of escalating hostilities, is expected to reduce risks in one of the world’s most critical energy corridors.

Yet shipowners, insurers, and refiners remain cautious, with many reluctant to resume operations until security guarantees are clearer, according to a Bloomberg report.

The Strait of Hormuz handles about a fifth of global oil and liquefied natural gas shipments.

Its closure during the conflict forced buyers to scramble for alternative supplies, and many refiners have already secured long‑term arrangements outside the Strait. 

The report notes that confidence in the corridor will take time to rebuild, as companies weigh the risk of renewed hostilities against the cost of rerouting cargoes.

Alternative supply chains cushion impact

According to the report, importers have adapted to the disruption by sourcing crude and LNG through pipelines and road networks across Saudi Arabia, the UAE, and Oman.

These routes, though more expensive and slower, have provided a measure of stability during the crisis. 

Analysts say that even with Hormuz reopening, many buyers may continue relying on these alternatives until the security situation is firmly resolved.

China’s weaker crude import demand has also moderated the impact of the Strait’s closure.

Citi estimates that China can sustain imports near 8.7 million barrels per day without significantly depleting inventories, suggesting demand from Asia may not provide a major boost to prices in the near term. 

BMO Capital Markets adds that alternative shipping routes and ongoing diplomatic efforts have kept oil prices surprisingly contained despite repeated US–Iran strikes.

Bloomberg highlights that refiners in India and East Asia have diversified their supply chains, reducing reliance on Hormuz shipments.

This shift has helped cushion markets from volatility, though it has also reshaped trade flows in ways that may persist even after the corridor reopens.

Gradual recovery expected

While the reopening of Hormuz is a critical step toward stabilising global energy markets, the recovery will be gradual.

Shipowners and insurers will need months to rebuild confidence, and refiners may continue to rely on alternative supply chains established during the conflict. 

Analysts stress that the path back to normal trade will be slow and uneven, with geopolitical risks likely to resurface.

The interim deal has lifted sentiment, but the market remains wary.

Oil prices have stayed relatively contained, reflecting both muted Chinese demand and the availability of alternative supply routes. 

For traders and policymakers, the reopening of Hormuz reduces immediate risks but does not eliminate the structural vulnerabilities of a chokepoint that remains central to global energy flows.

As the report noted, the Strait of Hormuz will continue to be a flashpoint for geopolitical tensions.

Even with the agreement in place, the prospect of renewed conflict means that global energy markets are unlikely to return to business as usual quickly. 

The coming months will test whether the deal can hold and whether confidence among shipping and energy companies can be restored.

At the time of writing, the price of West Texas Intermediate crude oil was at $81.05 a barrel, down 4.5%, while Brent was at $83.89 a barrel, down 3.9% from the previous close.