What happens next?
Assuming the strait has truly reopened, a logistical nightmare is about to unfold.
Step one: Clearing the strait’s bottlenecks. That’s going to take a long time, since tankers move about as fast as you can ride a bicycle.
First, the 128 or so tankers stuck in the strait need to clear out, carrying around 160 million barrels of oil with them, according to Capital Economics. That will make way for empty tankers to enter the strait, load up and head back out.
A return to full tanker transit capacity could take up to three months, according to Victoria Grabenwöger, senior oil analyst at Kpler.
Step two: Drawing down stockpiles. Empty ships will first draw oil from the warehouses that have been filled up – because producers had nowhere else to put it.
The good news: Refiners were pragmatic about their storage and never fully filled their stockpiles. That should reduce some of the time it would otherwise take to reboot pumps. But fuller-than-typical inventories will nevertheless delay getting oil production back up to full capacity.
Step three: Restarting production. Middle Eastern oil wells were largely shut off during the war. Turning on production isn’t like flipping a switch. It’s a complex engineering challenge that involves serious physics and labor over up to several weeks.
Production will need to be restarted – slowly – to ensure reservoirs of crude don’t collapse, requiring re-drilling and substantial repairs. Water and gas injected into wells need to be rebalanced, which is a tricky business.
Because wells in the region are large and close to one another, restarting production will require significant coordination across companies and countries to ensure injected water and gas pressure remain consistent across multiple wells.
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Step four: Making repairs. A number of refiners, natural gas producers and some oil producers were damaged during the war. Some repairs to the damaged critical infrastructure could take years to complete, oil companies said.
There’s a lot of oil go get back online: 12 million barrels per day of crude output and 3 million barrels of refined petroleum products have been shut across the Middle East – mostly in Saudi Arabia and Iraq, according to Kpler. That’s no easy feat.
The big questions
All of that assumes the war is over and there are no further disruptions in the strait. And we all know what happens when you assume….
The past weeks have seen many peace fakeouts, leading traders to keep oil prices high. Skepticism remains: Despite oil tumbling more than 8% Friday, Brent crude prices remain above $90 – about $20 higher than they were before the war started.
A satellite image shows the ship movement at the Strait of Hormuz on April 2, 2026, in space. European Union/Copernicus Sentinel/Handout/Reuters
Traders will watch how the situation unfolds over the next several weeks and months to see whether Iran is truly ready to give up the strait – the trump card it had used to maximize economic leverage over the United States. If so, will Iran stop charging tolls for ships to pass through? Will the administration continue to blockade Iranian oil, or will it give in to Iran’s demand that the blockade be lifted as a precursor to peace?
Also, shipping companies will need to feel comfortable actually sending their vessels through the strait. Insurance companies have sent marine coverage prices surging by thousands of percentage points, and they may be unwilling to offer affordable coverage while the situation remains precarious. Lloyd’s of London declined to comment.
Iran had threatened to mine the strait, and on Friday directed ships to traverse through a designated route – and only if they receive permission to pass. Ships may be unwilling to take on that risk.
Tankers may begin to test the waters, so to speak, over the next few weeks to ensure operations can resume without incident, Grabenwöger said. Companies will probably ask for naval escorts and coordination to ensure safety.
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Hapag-Lloyd, the German shipping company, called the re-opening announcement “good news” and would “prefer to pass the strait as soon as possible” once its insurance and clearance questions are resolved.
Shipping behemoth Maersk, on the other hand, said it has made no changes to its guidance to vessels since Trump announced the strait was reopened, but said that could change as the situation develops.
“The fine print of the agreement will matter,” said Helima Croft, global head of commodity strategy at RBC Capital Market and a former CIA analyst. “If Iran continues to have the final say on passage, some insurers and shippers may be reluctant to rush back in.”
What happens to oil and gas prices?
Traders will try to test a new floor for crude – maybe close to $80– but not much lower than that, said Dan Pickering, founder and chief investment officer at Pickering Energy Partners.
“I suspect there will be wrinkles that makes this a very choppy market,” he said.
Traders work on the floor of the New York Stock Exchange during morning trading on April 17, 2026 in New York City. Michael M. Santiago/Getty Images
The futures market now projects Brent oil prices to be around $77 by year-end – not returning to pre-war prices until 2029. Historically, Brent needs to be in the $60 range for $3-a-gallon gas, noted Michael Green, chief strategist at Simplify Asset Management. The market doesn’t anticipate that happening until 2030.
The longer this peace lasts, and the more evidence that production is rebooting, the lower oil prices could go.
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But that’s a lot of “ifs.”
“We’d feel more confident in the prospect of a peace agreement if we were hearing positive signals from both sides, of course,” said Thierry Wizman, global FX & rates strategist at Macquarie Group. “Trust in the market’s rally, at this junction, requires trust in Trump alone.”
CNN’s Mitchell McCluskey contributed to this report.
This story was first published on Cnn Business
