Brent crude falls below $80 as Hormuz reopening faces delays

The reopening of the Strait of Hormuz is proving far slower than promised, keeping oil markets on edge.

Brent crude slipped below $80 a barrel Wednesday as more tankers tested the Strait of Hormuz, though a full recovery in flows remains weeks away amid minesweeping delays and unresolved insurance questions. West Texas Intermediate traded flat near $75.79.

"The most likely scenario is a phased restart, with some form of traffic-management mechanism involving Iran and Oman," said Adam Sharpe, vice president of editorial at Lloyd's List Intelligence. "But the unresolved questions are significant: whether vessels need prior permission, whether Iran will impose service charges, whether foreign naval escorts are accepted, and whether mines or other residual risks require a clearance process."

Three Saudi-flagged supertankers carrying about 6 million barrels of crude exited the strait Thursday after weeks with their transponders off, according to maritime analysis firm Kpler. The Hong Kong-flagged Tong Lin Wan and France-flagged Mraikh also passed through. Yet more than 500 vessels remain queued, and Kpler estimates 118 tankers are stranded in the Persian Gulf — a backlog that could take 10 to 15 days just to clear mechanically. Before the war, the waterway saw 650 to 770 cargo-vessel transits per week, or roughly 90 to 110 per day.

The bottleneck matters because the strait carries about one-fifth of the global oil supply. Goldman Sachs cut its Brent forecast to $80 for the fourth quarter of 2026 from $90 previously, and to $75 for 2027, warning that "supply recovery might be stronger" than estimated. President Donald Trump, who signed the preliminary peace deal with Iran on Wednesday, called for steeper drops in gasoline prices.

Logistics and security hurdles remain

Even after the political agreement, restarting traffic is proving complex. Iran's Persian Gulf Strait Authority said ships must submit "compliant transit requests" at least 48 hours before arriving. The waterway is believed to contain an unknown number of Iranian naval mines, and minesweeping operations could take weeks. At least 46 attacks have been carried out against ships near the strait since late February, killing 14 seafarers, according to the International Maritime Organization.

War-risk insurers have yet to reinstate coverage for most vessels. "Underwriters will want evidence of a stable and predictable operating environment: consistent safe transits, no interference, clarity on mine risk, and no renewed escalation," Sharpe said. Pricing remains highly sensitive to vessel flag, ownership, and trading history.

The International Association of Independent Tanker Owners called for greater clarity on the practical steps needed to facilitate safe passage. "Without clarity on these issues, ships will be unsure whether to transit the Strait of Hormuz," said Tim Wilkins, INTERTANKO's managing director. "Some ships will, of course, start to move. That will be natural. But ship owners have adopted a very cautious approach."

Regional strife adds fresh uncertainty

Oil prices reversed an earlier decline Friday after deadly clashes between Israel and Hezbollah killed 16 people in Lebanon and four Israeli soldiers, threatening the broader ceasefire underpinning the US-Iran deal. A planned meeting between US and Iranian officials in Switzerland was canceled. The Islamic Revolutionary Guard Corps ordered ships via radio to avoid the area, according to unconfirmed reports cited by German publication Bild. Israel and Hezbollah later agreed to a cease-fire in Lebanon due to begin Friday afternoon local time.

The last time the strait faced a disruption of this magnitude, during the Iran-Iraq war in the 1980s, it took months for traffic patterns to normalize. The current situation may resolve faster given the 60-day framework of the US-Iran memorandum, but the coordination required among Iran, Oman, the UAE, naval forces and insurers means a return to pre-war throughput of 17 million barrels per day is unlikely before the third quarter.

This article is for informational purposes only and does not constitute investment advice.