Kpler has shifted its forecast for reopening the Strait of Hormuz to 2027, signaling prolonged pressure on oil prices. Their commodity research director, Matt Smith, shared this update on CNBC.
After five months of ongoing conflict, there is still no clear solution. Although a June memorandum between the US and Iran briefly reopened the strait, tanker traffic has since dwindled significantly.
US forces continue nightly attacks on Iranian military and maritime positions, maintaining tension in the region. Meanwhile, another critical route, Bab el-Mandeb, is now under threat after Saudi Arabia rerouted 3.25 million barrels per day through the Red Sea.
The Iran-backed Houthis in Yemen declared a maritime blockade on Saudi shipping and recently attacked two Saudi tankers. This development adds to the risk of disruption in global oil flows.
Smith highlighted that the strait normally handles 15 million barrels per day, but that flow has come to a near standstill. He emphasized the delay in reopening could extend well into next year.
The impact on oil prices is already noticeable. Brent crude surged nearly 40% recently, reaching above $100 per barrel before dropping back amid reports of revived US-Iran negotiations. Refined products are feeling even more strain, with diesel prices hitting about $180 per barrel and gasoline around $140.
Concerns about jet fuel shortages seem to be easing, but this has shifted pressure onto diesel and gasoline markets, which could worsen going forward.
