It will take 2 to 3 months for Middle East oil supplies to return to normal levels, even if shipping through the Strait of Hormuz fully resumes, according to a new analysis by the International Monetary Fund (IMF).
“Industry estimates suggest it will take 2 to 3 months for a significant portion of oil flows to resume once the waterway is fully reopened. In the long term, concerns are that a prolonged production shutdown could cause permanent losses, especially in areas where there is a shortage of financing to resume field development“, the Fund's experts note, commenting on the situation around the Strait of Hormuz.
The global oil shortage will be resolved gradually, and oil stocks are approaching minimums.
“Regardless of when the restoration of supplies begins, the oil shortage will disappear only gradually. Therefore, stocks will approach operating minimums – levels below which exploitation is associated with damage to the physical system itself“, IMF experts emphasize, commenting on the situation around the Strait of Hormuz.