Will energy prices return to pre-war levels if Iran and US strike deal? | Iran War Briefing Day 91

Added: 2026-05-31

[00:00:00]So, it's day 91 of President Trump's 4 to 6-week war. When, not if, the Strait of Hormuz is finally opened, how long will it take before energy prices reduce to their pre-war level? And are we at risk of seeing a repeat of this anytime in the future? Well, phase one of any um operation to open the straits will have to deal with the minefield, which is just to the southern side of the Strait of Hormuz. Now, Iran put the mines in place. They will undoubtedly be the lead in clearing it, but the international community has also offered support to try and help clear that. The uh RFA Lyme Bay from the Royal Navy is a mine clearance vessel. The challenge, of course, is that whilst that mine clearing is going in place, there's very limited availability to move shipping around it. Therefore, probably only one lane will be open, and the uh evidence suggests that the priority will be to export, rather than import. Get those full tankers moving, get the energy oil infrastructure moving again, and start to clear some of the backlog. Once that is clear, then you can move on to phase two. How long will the minefield take to clear? Depends on how many mines are in there. Probably days, maybe weeks. Once you've gone to phase two, though, now you can start to establish two-way flows of uh shipping in and out of the straits. Before the war, there was a smooth flow just to the north of Oman.

[00:01:15]That was the outbound leg, and the inbound leg into the straits was literally just to the north of that, and out again. Um that is the pre-war level.

[00:01:24]You've got to deal with a lot of backlog, 1,500 to 2,000 vessels that are in here, trapped. Therefore, they'll take quite a while to settle down before you get down to a steady state. But once that has all been cleared, you then move into phase three, which is steady-state operations. Sounds smooth, but Iran has already suggested that it might be wanting to work with Oman to create an area where it manages the Strait of Hormuz for some fees. It's even released this map showing its claimed area of control. Now, of course, America has said such a move would be completely unacceptable. Be interesting to see how that's dealt with as part of the negotiations at the moment. But even when the Strait is open, there's still a legacy that needs to be dealt with. The South Pars oil field is a good example that was had a significant damage through the course of the war. All of that will need to be repaired. Some estimates believe it'll be years, not months, to get that repaired. Indeed, Qatar believes that some of their energy infrastructure will take 5 years to get repaired. Now, whilst that's happening, clearly the supply of energy will be reduced, therefore the price of it will be higher. Be interesting to see if OPEC steps in and increases production try and bring down prices, but all this repair work will cost money. All of that will undoubtedly translate onto the bottom line for customers. Of course, one of the risks here for the Middle East is they know that actually this has been devastating for their economies.

[00:02:43]They rely on the export of energy into the global markets, therefore they've become very dependent on Iran and on the Strait of Hormuz. So, if there was to be a repeat of this, how would they mitigate that? Well, one of the ways they've been doing it is Saudi Arabia has already been building and built a pipeline across its country so it can offload oil via the Red Sea rather than the Strait of Hormuz. And likewise, the UAE is building a pipeline down to the south, not yet finished. But even when they have done that, that will have clearly take time and will clearly cost a lot of money. Once again, find its way on the into the consumer. Now, all of this, of course, is that the Strait of Hormuz was not an issue before the war.

[00:03:22]Now it is, and actually Iran has gone from being a pariah state to actually having significant leverage over the whole of the international community.

[00:03:30]So, what was the war all about? Well, actually it is worth remembering that most of the last 91 days we've been talking about the Strait of Hormuz.

[00:03:37]That's not what the war was about. It wasn't an issue pre-war. The war was all about nuclear. It was about Iran's ability to develop a nuclear weapon, which Trump was determined to stop, and also about enrichment of uranium. Now, the memorandum of understanding that looks to be about to be signed, The first priority would be to get the Strait of Hormuz opened. The nuclear issue, the core, will be conducted at some stage during that 60-day window.

[00:04:00]Most experts believe that will take years, not days, to resolve. So, the real question then is what was this war all about? How will history judge who were the winners and the losers? I suspect most of that would depend on your perspective, whether it's Iranian, American, or the rest of the international community.