Key Highlights

  • Analysts estimate four to eight weeks for oil prices to stabilise under a durable ceasefire, given tanker backlogs, elevated insurance premiums, and low commercial inventories.
  • Saudi Arabia and the UAE are expected to restore export capacity most quickly, while Iraq faces a recovery timeline of potentially a year or more given larger production shut-ins.
  • Around 20 tankers per day need to transit the strait before market flows can be considered largely restored to pre-war baselines, according to market estimates.

Analysts noted that sentiment had clearly improved following the ceasefire, but that sentiment is not the same as supply, adding that it will take time for production to ramp back up, for logistics to normalise, and for the risk premium embedded in crude prices to dissipate.

Countries such as Saudi Arabia and the UAE, which were able to export some oil through alternative pipeline routes during the conflict, are expected to be among the quickest to restore full capacity, while Iraq faces a materially longer recovery timeline given a much larger production shut-in and more complex field restart requirements.

The supply dynamics are further complicated by the conditional structure of the ceasefire itself. Oil exporters are unlikely to fully restart production until they have confidence that the strait will remain durably open and that a ceasefire will hold beyond the initial 30 to 60-day negotiation window. That caution limits the speed of the supply response even if the diplomatic environment improves.

Analysts believe that around 20 tankers per day moving through the strait would need to be sustained before the market can consider flows to be largely restored, a threshold that requires not only diplomatic stability but reduced shipping insurance premiums and proven safe passage conditions.

For OPEC producers, the timing and pace of supply resumption carries strategic importance. A rapid, uncoordinated release of backlogged crude could undercut the pricing floor that the group has sought to defend throughout the conflict period, raising the likelihood of coordinated output management in the months ahead.