On July 15 (local time), according to TASS citing information from the International Monetary Fund (IMF), oil supplies from the Middle East will not be able to quickly return to normal even if transportation through the Strait of Hormuz is fully restored.
According to the IMF, energy industry estimates show that it will take about 2-3 months for most of the oil flow through this area to be restored after the strategic shipping line returns to normal operation.
The report also warned of a noteworthy long-term risk that oil fields having to stop exploitation for a long time could cause production to decline permanently, especially in areas lacking funding to restart oil wells.
Industry estimates show that it will take 2 to 3 months for most of the oil flow to resume after the waterway line is fully opened. The greater concern is that prolonged production shutdowns could lead to permanent production losses, especially in places lacking capital to restore exploitation," the IMF said in the report.
According to TASS, the above assessment was made in the context of the security situation in the Strait of Hormuz still developing complicatedly.
TASS reported that after the conflict between the US, Israel and Iran broke out at the end of February, the Iranian Islamic Revolutionary Guard Corps (IRGC) launched a large-scale retaliatory operation. The Iranian government then announced the closure of the Strait of Hormuz to ships linked to the US, Israel and countries that Tehran accuses of supporting military actions against Iran.
According to data quoted by TASS, about 25% of global oil traded volume and nearly 20% of liquefied natural gas (LNG) transported by sea passes through the Strait of Hormuz, causing any disruption on this maritime route to potentially strongly impact the world energy market.
TASS also reported that the US and Iran signed a memorandum of understanding on a ceasefire in June. However, from the night of July 7 to the early morning of July 8, Washington resumed large-scale airstrikes against Iran, accusing Tehran of violating the agreement.
On July 10, US President Donald Trump declared the ceasefire with Iran invalid, although negotiations between the two sides are still ongoing.
