Summary
- Walter Bloomberg reported that Rystad Energy estimates an agreement between the US and Iran may still leave oil market normalization taking six to eight weeks.
- It said that even after the Strait of Hormuz reopens, the recovery in crude supply could be delayed because ship insurance repricing, the resumption of sailings, and the restoration of confidence in the shipping industry would still be needed.
- Markets are focused on variables including the actual speed of supply-chain recovery, stabilization in insurance premiums, and the normalization of shipping operations, even as oil futures prices could react immediately.
Forecast Trend Report by Period
An agreement between the US and Iran may not quickly restore normal conditions in the oil market, underscoring the risk of a prolonged supply-chain recovery.
Walter Bloomberg reported on May 6 that Rystad Energy estimates it could take six to eight weeks for the oil market to normalize even if the Strait of Hormuz reopens.
Rystad said ship insurance would need to be repriced, sailings resumed and confidence in the shipping industry restored.
As a result, oil futures may react immediately, while a recovery in actual crude supply flows could take longer.
Shipping and crude transport through the Strait of Hormuz are currently disrupted by military tensions in the Middle East.
Markets are watching not only whether negotiations advance, but also how quickly supply chains can be restored. Insurance premium stabilization and a return to normal shipping operations are seen as key variables.
JH Kim
reporter1@bloomingbit.ioHi, I'm a Bloomingbit reporter, bringing you the latest cryptocurrency news.
