{"id":150521,"date":"2026-06-08T08:24:12","date_gmt":"2026-06-08T08:24:12","guid":{"rendered":"https:\/\/www.europesays.com\/iran\/150521\/"},"modified":"2026-06-08T08:24:12","modified_gmt":"2026-06-08T08:24:12","slug":"from-trickle-to-torrent-hormuz-reopening-may-trigger-a-global-oil-flood","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/iran\/150521\/","title":{"rendered":"From trickle to torrent: Hormuz reopening may trigger a global oil flood"},"content":{"rendered":"

When the day comes, the reopening of the Strait of Hormuz<\/a> will be an extraordinary event: restarting about 10,000 oil wells, pumping roughly 15% of the world\u2019s production, that had been shut down for a hundred days and counting. Nothing even remotely close has been attempted \u2014 ever. The oil industry doesn\u2019t have a playbook for it; it will learn by doing.<\/p>\n

Unsurprisingly, the commodity market is deeply divided about how long it would take: oil bears believe it could be done in days and weeks, while the bulls talk about six to eight months, perhaps even a year. The most pessimistic say many wells won\u2019t restart at all.
My industry soundings are far more upbeat: When it happens, it would start as a trickle, but very quickly \u2014 in just a handful of weeks, if not days \u2014 transform into an oil flood. I\u2019m on the side of the bears, as you may have guessed.<\/p>\n

Admittedly, resuming shipping in the strait would require a diplomatic deal between the US and Iran<\/a> that has so far proven elusive. But allow me to speculate on the day after Tehran and Washington sign a memorandum of understanding that, in practical terms, allows tanker traffic on the waterway to return to prewar levels within, say, 30 days.<\/p>\n

Also Read: West Asia War: Hormuz strait will be open but with transit fees, Iran envoy to Moscow quoted<\/a><\/p>\n

\"ETLive Events
I\u2019m sidestepping key questions: Would Iran charge tolls or fees? Would oil tankers use the Iranian shipping lanes or the Omani<\/a> ones? But the starting point is somber. The closure of Hormuz has forced Saudi Arabia<\/a>, Iraq, Iran, the United Arab Emirates, Kuwait, Qatar and Bahrain to curtail output by 45%, from a pre-war level of roughly 32 million barrels a day to about 17.5 million last month, according to the International Energy Agency<\/a>.
\"OilBloomberg
Before oil can re-start, the first job is to get tankers past the Hormuz bottleneck into the Persian Gulf<\/a>. Often, I hear the reopening would be a two-phase operation: First, tankers already laden would depart, and only then could ships on ballast go beyond the strait to load. That\u2019s nonsense: It would happen simultaneously. Greek shipowners have already pre-positioned multiple empty supertankers within only three to five days of navigation from Hormuz for the job.<\/p>\n

War insurance wouldn\u2019t be a problem: It\u2019s available, at reasonable prices, from multiple companies. What would be needed is confidence the US-Iran deal is holding. Call it proof of concept. The most adventurous shipowners will go first \u2013 think the likes of Evangelos Marinakis and George Procopiou \u2013 paving the way for other, more conservative, owners to follow.<\/p>\n

If the diplomatic accord holds, it will take time to organize the dozens of tankers needed to carry the oil when the flow fully resumes \u2014 but that won\u2019t take as long as conventional wisdom assumes. True, some tankers are in the wrong position, having diverted to do other business, say, shipping crude from the US Gulf of Mexico to Japan. But plenty of tonnage is available.<\/p>\n

Also Read: OPEC+ set for fourth oil quota hike since Hormuz closure, sources say<\/a><\/p>\n

Frontline Plc<\/a>, one of the world\u2019s top supertanker owners, reckons that 55 large tankers are empty near the Persian Gulf, waiting for the strait to reopen. That equals 110 million barrels of capacity. The vessels are \u201ccontracted to industrial players like refiners and oil majors,\u201d Chief Executive Officer Lars Barstad told investors recently. Rather than put the tankers to work elsewhere, making as much as $100,000 a day, those companies have preferred to incur an opportunity cost, keeping the ships idle but near Hormuz. \u201cFor these guys to not have vessels available should the strait open can be an extremely costly affair,\u201d he said. \u201cFor them, this is logistics; it’s not necessarily profit.\u201d<\/p>\n

\"PipelinesBloomberg<\/p>\n

Pipelines Bypassing Hormuz<\/p>\n

If the transportation gets resolved quickly, as I expect, then it\u2019s all down to the flow of crude. So far, the infrastructure that needs to be restarted \u2014 the 10,000 or so wells, gas-and-oil processing centers, pipelines, storage tanks and ports \u2014 has emerged from the war largely unscratched. And where damage occurred, it has been largely repaired during the ceasefire.<\/p>\n

The lack of significant damage contrasts with other Middle Eastern conflicts. When Kuwait was liberated from Saddam Hussein<\/a> in 1991, its oil wells were on fire, for example. The closure this time has also been controlled. Unlike, say, the oil strike in Venezuela in 2002-2003, when wells closed by disgruntled employees in a matter of minutes were damaged, Saudi Arabia and its neighbors had time to shutter wells in an orderly fashion. Moreover, the oilfields haven\u2019t been battlegrounds, as they were during the 2011 Libyan civil war, thus allowing maintenance to continue.<\/p>\n

Nowhere in the region has output fallen to zero, because of the need to meet domestic oil demand and, in the cases of Saudi Arabia and the UAE, the use of pipelines bypassing Hormuz. Thus, petroleum engineers have kept some output running continuously, purposely selecting the wells most likely to have problems when reopening if they\u2019d been out of service. In other cases, they\u2019ve rotated the shutdowns, keeping some wells closed for a couple of weeks, then reopening them while shutting down others in an effort to never have an individual well out of business for more than a few weeks. They have choked down flows to reduce output to a trickle, but still keeping a few barrels coming out. By doing so, they try to avoid problems down the road, like clogging or loss of pressure.<\/p>\n

Also Read: US-Iran war: Trump explains why Tehran deal is taking time, says Hormuz blockade costs Iran $500M a day<\/a><\/p>\n

Zoom out, and it\u2019s clear the Middle Eastern oil industry hasn\u2019t shut down cold; it\u2019s been kept warm, a senior executive from the region tells me, waiting for peace. When the day comes, I expect about 50% of the region\u2019s total production capacity could come back online in a matter of days; within a few weeks, about 75% would flow again; and full capacity would be possible within a few months. I don\u2019t anticipate any long-term losses.<\/p>\n

Importantly, Persian Gulf output wasn\u2019t at capacity before the war \u2013 so it doesn\u2019t need to return to full capacity immediately. Because of OPEC+ quotas, several key countries pumped less than they are able to. Saudi Arabia, for example, can produce 12.5 million barrels a day, but was pumping only 10.4 million before the war \u2013 about 83% of capacity.<\/p>\n

Since February, oil demand has fallen due to the impact of high prices, while production outside the Middle East has also increased, notably in places like Brazil, the US and Canada. Put both together, and it means that Persian Gulf oil production doesn\u2019t even need to return to its pre-war level for global supply and demand to balance again.<\/p>\n

Oil engineers are, above all, expert problem solvers. So while the restart process won\u2019t be easy once traversing the strait is possible again, don\u2019t mistake difficult for impossible. The reopening of Hormuz, when politics allows it, will surprise with its speed.<\/p>\n","protected":false},"excerpt":{"rendered":"When the day comes, the reopening of the Strait of Hormuz will be an extraordinary event: restarting about…\n","protected":false},"author":2,"featured_media":150522,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[26],"tags":[299,102,6210,34,48412,39,493,50],"class_list":["post-150521","post","type-post","status-publish","format-standard","has-post-thumbnail","category-persian-gulf","tag-frontline-plc","tag-hormuz","tag-international-energy-agency","tag-iran","tag-omani","tag-persian-gulf","tag-saddam-hussein","tag-saudi-arabia"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@iran\/116713531845546326","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts\/150521","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/comments?post=150521"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts\/150521\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/media\/150522"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/media?parent=150521"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/categories?post=150521"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/tags?post=150521"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}