Tony Munro

Well, first of all, it's not clear yet how quickly the reopening would take place.

One of the requirements of this ceasefire, according to the Iranian side, is that for ships to transit, that requires coordination with Iranian forces.

So that is a complication.

We just don't know how onerous that is.

When the Strait reopens and if shipping resumes even towards pre-conflict levels, the oil that's moving is oil that's on the water.

That's oil that's already been produced.

What still needs to happen would be

Plus, the war has proven to the markets just how much control Iran has.

there's the longer term concern in energy markets that now that Iran has been able to assert pretty effective control over traffic through the Strait, that this could become a continuous point of leverage that Tehran tries to exert.

It's a very important waterway.

A lot of Saudi oil that ordinarily would have transited the Strait of Hormuz is now transiting via pipeline to the west, to the port of Yanbu, and then south through Bab al-Mandeb.

So it's become very important as an alternative shipping route during this war.

It would be significant.

And the only way for the Saudi oil then to get out would be north.

Most of the oil that was originally coming through the Strait of Hormuz is headed for Asia.

It takes roughly four weeks or so for oil to get from there ordinarily to East Asia.

This would add something like 40 days to the trip as it goes through the Mediterranean and around the Horn of Africa and up to Asia.

So it would add a lot of time and expense to getting oil out.