US-Iran deal may delay, not end, oil supply disruption, says Rystad Energy

By Romel S. Gurky

A potential peace agreement between the United States and Iran could ease tensions in the Strait of Hormuz, but any recovery in physical oil supply would take weeks rather than happen immediately, according to a market note from Rystad Energy

Chief Oil Analyst Paola Rodriguez-Masiu said oil futures prices have already reacted to expectations of a deal, but physical oil markets operate on a slower timeline.

“A deal announcement would move futures further immediately,” Rodriguez-Masiu said. “However, the physical market does not run on political timelines.”

Rystad said even under an optimistic scenario involving a phased 30-day reopening of the Strait of Hormuz, meaningful recovery in oil volumes would only begin in June, while arrivals at processing ports could lag by another four to six weeks.

The consultancy said shipping insurers, vessel operators and buyers would require sustained and verified access before commercial confidence returns.

Read also: Oil markets remain volatile after Trump address on Iran conflict, Rystad says

Rystad maintained its estimate that physical flows would take six to eight weeks to normalize after credible access conditions are restored, with oil supply potentially returning to 80% to 90% of pre-disruption levels only by July.

The firm said current discussions reportedly involve a moratorium on Iranian nuclear enrichment, sanctions relief and a gradual reopening of Hormuz during a 30-day negotiation period.

Rystad also pointed to several developments supporting the credibility of negotiations, including China’s diplomatic engagement with Iran, the absence of public objections from Iran’s Islamic Revolutionary Guard Corps, and a reported pause by the United States in escorting commercial vessels through the strait.

The Strait of Hormuz is a key global oil shipping route connecting Gulf producers with international markets.

Editing by Alexander Ginting