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By Grant Smith
Oil industry experts have told OPEC+ that supply disruption caused by the closure of the Strait of Hormuz will persist to the end of the year, even if the waterway reopens promptly.
Consultants and analysts gathered at OPEC’s Vienna headquarters for a technical meeting on Monday warned that it will take many months to return to pre-war operations, according to two attendees of the event. They asked not to be identified as the meeting was private.
The Strait of Hormuz — through which 20% of the world’s oil and gas had previously flowed — was effectively blocked at the outset of the war between a US-Israeli alliance and Iran on Feb. 28. Its closure has caused prices of key fuels like gasoline, diesel and jet fuel to soar, hitting consumers with a new wave of inflation.
The assessment shared at the headquarters of the Organization of the Petroleum Exporting Countries echoes the views of Adnoc chief executive Sultan Al Jaber, who said that oil flows from the Middle East won’t fully recover until well into 2027 even if the Iran conflict ends immediately.
OPEC periodically invites analysts to brief officials and representatives from member countries at the group’s secretariat. The attendees didn’t specify which firms in particular had made the comments about the impact of Hormuz’s closure.
Scheduled presenters at the technical meeting included S&P Global, FGE NexantECA, Vortexa, Kpler Ltd. and Energy Aspects.
On Tuesday, OPEC will hold a meeting of its Economic Commission Board, a panel of technical experts which analyses market conditions on behalf of ministers, who are due to meet online on June 7.
— With assistance from Fiona MacDonald
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