High oil and gasoline prices, as well as energy supply issues, will not be resolved overnight despite the peace deal with Iran and the reopening of the Strait of Hormuz announced on Sunday, AP reports, according to UNN.
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According to energy experts, it will likely take months before energy companies can restore operations to levels that satisfy global demand. The slow pace of the oil delivery and refining process, as well as doubts regarding the safety of transit through the strait, mean that the effect will not be noticeable immediately, they said.
Vessels loaded with oil have been stuck in the Persian Gulf for over three months, unable to safely traverse the waterway that typically carried approximately one-fifth of the world's oil and gasoline supplies before the war began.
"It will take time for people to feel comfortable and for insurance to be secured... especially for people on the ground to be able to resume operations of some of these assets," said Daniel Evans, head of global fuel and refining research at S&P Global Energy.
However, oil prices fell early Monday following the announcement of the deal.
Brent crude, the international standard, dropped by $3.45 to $83.89 per barrel. U.S. benchmark crude lost $4.03 to $80.85 per barrel.
These prices are still significantly higher than the approximately $70 per barrel oil was trading at before the war started.
According to Evans, as prices decline, the stranded ships will need to exit the strait, and then new tankers will have to enter for loading.
"To bring a vessel in, you need to be sure that you have a large enough window of time to bring it in, load it, and bring it out," he added.
Oil tankers also move slowly, he explained. It takes months to travel from the strait to distant countries, deliver the oil to a refinery for processing, and then arrive at the final destination.
Furthermore, some producers in the Middle East suspended oil production when they ran out of storage space. Restarting these operations can be a slow process.
Countries such as Saudi Arabia and the United Arab Emirates, which have alternative pipelines or routes for oil delivery besides the Strait of Hormuz, may be among the fastest to resume production, said Alan Gelder, senior vice president of refining, chemicals, and oil markets at the analytical firm Wood Mackenzie.
"But places like Iraq could face much greater difficulties, given that there were many more shutdowns there, their fields are more complex... it is quite possible that it will take about a year before they recover," he said.
Investment in the energy system, the results of which may only be visible years later, stalled after the closure of the strait, Gelder said. Therefore, it will take time for this capital to restart.
Countries that stopped oil production will not want to resume it until they know that the operation of the strait is stable and durable, and that the ceasefire will last more than 30 or 60 days, said Daniel Sternoff, a senior research scholar at Columbia University's Center on Global Energy Policy.
"We don't know what 'open' means or what the rate of removal of the stranded material will be," he said.