The U.S.-Iran deal and the potentially imminent reopening of the Strait of Hormuz do not mean that oil and gas trade will quickly return to its previous levels. The announcement of the deal is just the first step, and it could take months for oil and gas shipments in the region to return to pre-war levels. Middle Eastern producers have been forced to shut in more than 10 million barrels per day of oil production since the Strait of Hormuz was closed three and a half months ago. Producers will need months to fully ramp up wells to previous output levels, while the status of the Strait of Hormuz – even if it re-opens on Friday as expected – is still unclear. “We don’t know what open means or what the speed of evacuation of trapped material is going to be,” Daniel Sternoff, senior fellow at the Center on Global Energy Policy at Columbia University, told AP late on Sunday. Some producers like Saudi Arabia and the United Arab Emirates would be quicker to restore output compared to Iraq, for example, which had to curtail the highest proportion of its production due to its inability to move the crude out [...]
