Here's what needs to happen before oil starts flowing through the Strait of Hormuz again

Key Points:

• The ongoing U.S.-Iran war has severely disrupted shipping through the Strait of Hormuz, a critical chokepoint for global oil supply, with daily transits falling by 90-95% and hundreds of tankers trapped in the Persian Gulf.
• Marine insurance costs for tankers passing through the strait have surged from under 1% prewar to as high as 10% of vessel value, but safety concerns and crew protection are the primary reasons for reduced shipping, not insurance costs alone.
• Military escorts for tankers have been proposed but are unlikely to be effective or implemented during active hostilities; experts suggest escorts would only boost shipping confidence after a ceasefire or significant de-escalation.
• A ceasefire could gradually restore shipping and oil exports, but the process would be slow due to the backlog of tankers, production curtailments by oil producers, and the need for confidence in Iran’s adherence to any agreement.
• Despite the conflict, some ships continue to transit with Iran’s permission, particularly from friendly countries, while Iran reportedly seeks to impose fees for passage; oil prices remain elevated and volatile, with full market normalization expected to take months even after hostilities end.