Mike Baker

Ship owners, insurers, and cargo operators all want proof that the waterway is truly secure before returning to pre-war operating levels.

As one shipping executive put it, an extended ceasefire agreement is only the beginning of the recovery process.

And even once ships begin moving freely, another challenge remains.

The oil itself still has to reach market.

Now, this is where many observers misunderstand or just simply aren't aware of how energy systems work.

Financial markets react immediately.

Physical commodities, not so much.

A tanker leaving the Persian Gulf today still requires weeks to reach its destination.

The crude oil must then be offloaded, refined, processed, and distributed before consumers see the benefit.

According to estimates cited by the Journal, meaningful supply relief may not begin appearing until late August, with broader normalization potentially taking until September.

That means inventories will continue to face pressure throughout much of the summer.

The global energy system is still operating in the gap that's between the end of the disruption and the return of actual supply.

Now, there's also the issue of production.

Middle Eastern producers reduced output dramatically during the crisis.

According to data cited by the Journal, regional production fell by more than 11 million barrels per day compared to pre-war levels.

Bringing those fields back online is not as simple as just flipping a switch.

Some oil fields can restart relatively quickly, while others face maintenance challenges after sitting idle for months.

In Iraq, analysts say some wells may have suffered damage that could take months to fully assess and repair.

Researchers estimate that restoring regional production to pre-war levels could take anywhere from several months to nearly a year in some locations.

Meanwhile, governments around the world have been drawing down stockpiles to help offset the disruption.