Oil prices are still hovering just below $100 per barrel as a shaky ceasefire in Iran goes into effect, but there’s a long road ahead even if the war concludes.
Some market players are bullish: Israel reopened a major offshore gas facility, an oil executive in Iraq said oil production could ramp up within a week, and according to BloombergNEF, there are a dozen already-loaded LNG tankers lined up outside the Strait of Hormuz that could cross quickly.
Yet oil prices tipped up again Thursday, a sign traders are still skeptical that the strait will reopen for the free transit of more tankers anytime soon, especially as insurers and shipowners remain concerned that security conditions could collapse at any moment. In the meantime, the director of the International Air Transport Association warned it will take “a period of months” for jet fuel supply chains to even out. And Asia “is caught between a market it cannot afford to buy from and a supply line that will take weeks to restart — and a two-week ceasefire window does not change either of those conditions,” Janiv Shah, vice president of oil markets at Rystad Energy wrote in a note.