ISLAMABAD: Despite the announcement of a fragile ceasefire involving Iran, the United States, and Israel, global oil and gas prices are expected to remain elevated for months, according to analysts.
The conflict severely disrupted energy flows after Iran restricted passage through the Strait of Hormuz—a critical route that handles nearly 20% of global oil and gas exports. The move, along with attacks on regional energy infrastructure, triggered sharp price increases and supply shortages affecting multiple sectors, including fertilisers and industrial gases like helium.
Experts say the resumption of normal trade flows will take time. Rockford Weitz noted that stabilisation depends on the consistent and secure movement of shipments through the strait. Before the conflict, 120–140 vessels crossed daily, but recent traffic dropped drastically, highlighting the scale of disruption.
Adding to the uncertainty are high insurance costs, potential transit fees, and halted production in countries such as Iraq due to storage constraints. Usha Haley warned that restoring production and supply chains could take weeks to months, particularly for LNG markets.
Meanwhile, Kristalina Georgieva of the International Monetary Fund indicated that global economic growth forecasts may be downgraded, even if the ceasefire holds.
Analysts also point to a sustained “risk premium” on Gulf energy supplies, keeping prices above pre-conflict levels. Rachel Ziemba noted that while some short-term supply relief is possible, long-term stability depends on a durable peace agreement and restoration of production across key regions.
With geopolitical tensions still unresolved and infrastructure recovery underway, experts agree that a full return to pre-war energy price levels remains uncertain and could take several months.
Story by Megha Bahree
