Strait of Hormuz reopening faces mines, insurance and tanker backlogs, delaying oil price relief

Analysts say the physical reopening of the Strait of Hormuz will be gradual even after a US‑Iran framework agreement. Mine clearance is the first hurdle, with estimates ranging from 40‑50 days to up to six months, while the United Nations‑backed war‑risk insurance premiums have risen to 1‑4% of a vessel’s value per transit, far above the pre‑war level of under 0.1%. An estimated 300 fully‑loaded tankers and 250 empty ships remain stranded in the Gulf, with another 300 empty tankers waiting to enter the Gulf of Oman.

Oil prices have already fallen from near‑$120 a barrel to around $80, but the market may need four to eight weeks for prices to stabilise. Shipping companies are unlikely to resume normal volumes until at least 20 tankers a day move through the strait, while the current backlog exceeds 250 tankers and 330 cargo vessels. Ongoing disputes over tolls and the legal status of the strait between Washington and Tehran also keep a risk premium in energy markets, meaning full oil‑flow relief will be limited for months.