A recently announced US-Iran deal will not lead to a quick return of oil and gas flows to previous levels. Experts predict it could take months for oil and gas shipments from the Middle East to fully recover after the Strait of Hormuz closure.
Middle Eastern producers have lost over 10 million barrels per day of oil production since the Strait of Hormuz closed three and a half months ago. Producers will need several months to bring oil wells back to full capacity. The status of the Strait of Hormuz, even with its expected reopening, remains uncertain.
This slow recovery of global oil supply has direct implications for Ghana's energy sector and broader economy. Ghana's petroleum sector is currently projected to recover in 2026, according to the Energy Minister. A delayed return of international oil flows could affect global oil prices, influencing Ghana's import costs for refined petroleum products and its revenue from oil exports. High global oil prices typically increase fuel costs within Ghana, impacting inflation and the cost of living for Ghanaians.
Daniel Sternoff, a senior fellow at the Center on Global Energy Policy at Columbia University, expressed caution. He stated, “We don’t know what open means or what the speed of evacuation of trapped material is going to be.” This highlights the uncertainty surrounding the actual re-establishment of trade routes.
Some producers like Saudi Arabia and the United Arab Emirates may restore output faster. However, Iraq, which significantly cut its production due to difficulties moving crude, faces greater challenges. Alan Gelder, senior vice president at Wood Mackenzie, noted, “Places like Iraq could be much more challenged because they’ve had a much bigger shut-in, their fields are more difficult.” He believes it could take Iraq about a year to return to full production.
Analysts at Wood Mackenzie predict that affected fields could reach 70% of prior production within three months. This could rise to 90% within six months, assuming a controlled ramp-up by operators. The last 1 million barrels per day of production will take considerably longer to restore.
Ole Hansen, head of commodity strategy at Saxo Bank, emphasized the importance of supply chain normalization. He stated, “The speed at which supply chains normalise and export flows recover will also play a key role in determining how much of the geopolitical risk premium remains embedded in the market.” This risk premium contributes to higher oil prices.
Some shipping companies are waiting for the deal to be formalized before transiting the Strait. Even then, organizing insurance and other practical issues will cause further delays in recovery. The agreement to reopen the Strait of Hormuz signals a potential end to the conflict. However, it marks only the beginning of a long recovery period for the global oil and gas industry, with ongoing effects on international energy markets and prices.