• Oil traffic through the Strait of Hormuz is unlikely to normalize before late July, with full recovery to prewar levels expected by end-September, according to HSBC.
  • Delays stem from mine clearance, insurance hurdles, storage drawdowns, and the time needed to restart production.
  • Saudi Arabia and the UAE may recover faster, while others lag, potentially keeping global oil markets tight into 2027.

Gradual Return to Normal

Oil shipments through the Strait of Hormuz are expected to normalize slowly, with a full restoration not seen until late 2026 or 2027, analysts warn. HSBC projects that flows may only reach prewar levels by end-September, but operational challenges could stretch the timeline.

“Without a deal to quickly clear mines and restore insurance coverage, the recovery will be halting,” said a person familiar with the matter. Efforts to restart production have hit snags, including damaged infrastructure and the need to rebuild storage buffers.

Divergent Recovery Speeds

Saudi Arabia and the UAE are likely to restore exports faster than Iran and other regional producers, thanks to more resilient infrastructure and better access to international insurance. However, a partial reopening could cap flows near 60% of pre-disruption levels for months.

“The bottleneck is not just physical—it’s about confidence,” said an energy analyst. “Insurers are still skittish, and shipping rates remain elevated.”

Market Implications

Global oil markets are likely to remain tight through late 2026, with Brent and WTI prices supported by the prolonged disruption. HSBC warned that without a swift normalization, inventories could be drawn down sharply, adding upward pressure on prices.

“The market is pricing in a V-shaped recovery, but the risk is that it’s more of a U-shape,” the analyst added. Calls to the Strait’s joint task force for comment were not returned.

Correction: An earlier version of this article incorrectly stated that full recovery would occur by end-2026. HSBC’s timeline points to end-September for prewar levels, with full normalization potentially extending later.