Even if the war in Iran ends soon, the oil market will take months to recover

President Donald Trump has indicated the U.S. will continue attacking Iran for another two to three weeks, which would bring us to mid- to late-April when we see some semblance of a resolution to this war.

But even if he’s right, it doesn’t mean the global oil market will somehow rubberband back into normalcy overnight.

Imagine it’s mid-April. Military actions against Iran just ended.

“The bigger question facing the global economy is, what will the status of the strait be?” said Gregory Brew, a senior analyst focused on Iran and energy at Eurasia Group.

He said the next milestone is opening up the Strait of Hormuz, which Iran now controls. But there’s a lot to be determined on how and when that might happen. “Will volumes recover to such an extent that goods can come and go the way that they were before, what kinds of risks will still exist?” Brew said.

The future of the strait looks messy, said Joe DeLaura, senior energy strategist at Rabobank.

“The strait will still take months to clear if Iran even wants it to be open. And on top of that, you have refinery damage, pipeline damage and production shut-ins,” he said.

All the oil production that’s turned off during wartime can’t get turned back on overnight, even in an optimistic scenario, said Rystad Energy chief economist Claudio Galimberti.

“Nothing in terms of production is going to happen until May,” he said.

So how long will it take to get to pre-war production? The general rule is it’s going to take as much time as the outage duration, Galimberti said. So if it’s out two-and-a-half months, it will take another 2-and-a-half months to get back to normal.

All of this means the market won’t see barrels in the sixties anytime soon.

“It's very unlikely that the price of crude drops below $80 a barrel at any point in 2026,” said Gregory Brew at Eurasia Group. “Both due to the size of the physical disruption that's taken place and the ongoing risk premia, stemming from the uncertainty.”

Plus, every day this goes on, there’s less physical oil out in the world. So there’s also the question of building back up reserves and inventories.

“The timing it takes to get back to normal and to rebuild those drawn down inventories and to get all the oil where it needs to be is really challenging. So we're going to be dealing with this through the summer driving season into the fall,” said Dan Pickering, chief investment officer at Pickering Energy Partners.

For Americans, he expects gas prices will be well above $3 a gallon through the rest of the year.