S&P says normal gas and crude flows won’t return until summer 2027

The good news for oil markets is that a ceasefire between the U.S. and Iran is no longer theoretical. The bad news, according to S&P Global, is that your tank still might not “feel normal” for a long time.

On Sunday, the U.S. and Iran announced a memorandum of understanding to end a conflict that has been waged on and off since February. The tentative deal was scheduled to be formally signed Friday, and it includes a provision to reopen the Strait of Hormuz so Middle East-produced oil and natural gas can ship around the world again. But in a research brief published Monday, analysts at S&P Global said normalization of flows is likely to take until the summer of 2027, with physical crude markets expected to remain tight throughout this summer.

That matters because reopening a chokepoint on paper is one thing. Getting physical barrels moving again is another. The Strait of Hormuz has been effectively closed to commercial traffic for months, prompting the International Energy Agency to call it the largest oil market disruption in history. According to S&P, supply losses are expected to exceed 1.5 billion barrels by the end of June. Even if the long-term supply story improves, “how soon” becomes its own separate bottleneck when markets are already running lean.

President Donald Trump said in a social media post that the strait would reopen “toll-free,” and that the U.S. would lift its naval blockade on Iranian ports. Yet traffic has remained subdued so far as details of the deal emerge. A BBC analysis published Tuesday found only seven vessels had transited the strait since the deal was announced, while nearly 600 tankers and cargo ships remained mostly idle in the Persian Gulf. That gap between announcement and action is exactly what S&P is pointing to: normalization is a process, not a flip of a switch.

Why the lag? Even when prices react quickly to signs of reopening, shipping can move slower because the real-world constraints are operational and financial. Oxford Economics researchers wrote in a research note published Monday that “Sailing through the strait will remain riskier and more costly than before the war.” They also warned that physical flows are still likely to recover gradually rather than immediately, even if markets believe the reopening deal is credible.

Oxford Economics pointed to shipping headaches, high insurance costs, and operational caution as the likely main constraints going forward. In other words, the risk premium does not disappear the moment diplomats shake hands. Unless insurers loosen terms and operators feel confident about safe passage, “reopened” can look a lot like “still not worth it.” That is the kind of second-order market effect executives often underestimate: logistics and risk management can dictate timelines even when supply capacity could theoretically come back faster.

Supply side frictions also remain. In a note published May 29, energy consultancy Wood Mackenzie laid out a best-case reopening timeline that still stretches out. An immediate reopening of the strait, they wrote, would see oil fields return to 70% of prior production within three months and to 90% within six months. The final tranche, roughly 1 million barrels of production per day, would take considerably longer, largely due to infrastructural repairs. For exporters, the recovery speed is uneven: Saudi Arabia and the United Arab Emirates are expected to recover toward the faster end because of high-quality reservoirs, infrastructure, and existing export pipeline capacity that can bypass the strait. Countries with more outdated infrastructure, such as Iraq, are expected to recover more slowly.

Capital Economics estimated on Monday that around 80% of energy flows could resume by the third quarter of 2026, but that a return to “normal” would not happen until 2027. Put together, the story becomes less about whether the strait will reopen and more about how long it takes for real supply chains to rebuild confidence, clear backlogs, and repair the damages that a prolonged closure creates.

For executives across energy, shipping, trading, and adjacent industries, the strategic takeaway is straightforward: planning that assumes “deal signed, flows normalize” is likely to break in practice. If physical crude markets remain tight through this summer and normalization stretches to summer 2027, then procurement strategies, hedging assumptions, insurance and risk frameworks, and infrastructure repair roadmaps all need to be built for a slower reversion to normal. In market terms, the ceasefire ends the fight. The operational reality of rebuilding the flow still has to catch up.