Strait of Hormuz Reopens Under Fragile US-Iran Truce, Oil Markets Stabilize

Status: RESTRICTED

Shipping Assessment: Commercial shipping companies are delaying full resumption of transit through the Strait of Hormuz despite the political agreement. Mitsui OSK Lines and the Baltic and International Maritime Council report that returning to the pre-war volume of 135 ships per day will take up to a month. Operators require mine clearance verification and lower war-risk insurance premiums before committing tonnage. Three Iranian tankers, including the Hero II and Diona, successfully crossed the former US blockade line on June 17, 2026. They carried 5 million barrels of oil to Asian markets .

Naval Activity: The US Navy will dismantle its blockade over a 30-day period. US forces will withdraw from the immediate proximity of Iranian waters. Iran and Oman will establish a joint administrative framework for the waterway. Iranian parliament speaker Mohammad Bagher Ghalibaf stated on June 17, 2026, that Iran will exercise sovereign rights. Iran plans to charge service fees to commercial vessels once the 60-day toll-free window closes .

Insurance Premiums: War-risk insurance premiums remain at peak levels. Underwriters refuse to lower rates until they observe a sustained pattern of safe transits. The standoff creates a delay where shipowners wait for cheaper insurance, while insurers wait for ships to prove the route is safe. This dynamic will slow the normalization of global energy supply chains.

Price Movement: Brent crude futures fell 1.12 percent to $78.66 per barrel on June 18, 2026. US West Texas Intermediate dropped 1.28 percent to $75.81 per barrel . Prices briefly spiked 5 percent the previous day due to uncertainty over the signing ceremony before stabilizing. Analysts project a new normal trading range of $80 to $90 per barrel. This is due to damaged regional refinery infrastructure.

Opec Response: Gulf producers face a shifting landscape as Iranian barrels prepare to re-enter the market. The US Treasury Department is issuing immediate waivers for Iranian crude exports. Saudi Arabia and the United Arab Emirates previously rerouted exports via the East-West pipeline and Fujairah port to bypass the strait. These alternative routes will likely maintain high volumes as buyers diversify risk.

Supply Disruption Assessment: The International Energy Agency forecasts that resolving the 12 million barrel-per-day supply disruption could create a massive supply glut by 2027. Global supply is projected to surge by 8 million barrels per day against a demand increase of only 2 million barrels . China issued a second batch of naphtha import quotas totaling 9.9 million tons. This reflects constrained petrochemical feedstock supplies during the conflict.

Btc Pipeline: The Baku-Tbilisi-Ceyhan pipeline remains a critical, secure artery for Caspian crude reaching the Mediterranean. With the Strait of Hormuz transition expected to be slow, European buyers continue to rely heavily on this route. State oil company SOCAR recently assumed operational control of the connected Baku-Supsa pipeline from BP. This move consolidates Azerbaijan's grip on regional export infrastructure.

Other Pipelines: Militants attacked a convoy belonging to the Oil and Gas Development Company Limited twice within 12 hours near the Sindh-Balochistan border on June 17, 2026. The Abu Dhabi Crude Oil Pipeline bypasses the Strait of Hormuz to reach the Gulf of Oman. Its utilization jumped from 30 percent to 80 percent during the blockade, moving 1.82 million barrels per day.

Pakistan: The State Bank of Pakistan held its policy interest rate at 11.5 percent on June 17, 2026. The central bank cited the drop in global oil prices as a positive indicator. However, it noted that domestic inflation remains at 11.7 percent. Pakistan posted a $459 million current account surplus in May 2026. This was driven by record worker remittances of $4.25 billion and reduced import pressures .

Azerbaijan: Azerbaijan is capitalizing on the Middle East instability to secure long-term European market share. Energy Minister Parviz Shahbazov announced on June 17, 2026, that the Trans Adriatic Pipeline has delivered 49.5 billion cubic meters of gas to Italy. The country also finalized contracts to supply 2 billion cubic meters of gas annually to German companies over the next decade.

Georgia: Georgia benefits from increased transit fees as Caspian energy flows bypass the volatile Middle East. The country serves as the primary transit corridor for the Baku-Supsa and Baku-Tbilisi-Ceyhan pipelines. The first phase of a feasibility study for a new Caspian energy corridor crossing Georgian territory is scheduled for completion in January 2027 .

• Maintain alternative supply routes, such as the Abu Dhabi Crude Oil Pipeline and the Baku-Tbilisi-Ceyhan pipeline, until mine clearance in the Strait of Hormuz is independently verified.
• Budget for potential transit fees in the Strait of Hormuz starting in mid-August 2026, as Iranian authorities have explicitly stated their intent to monetize the waterway.
• Delay renegotiating long-term freight contracts until war-risk insurance premiums adjust to the post-conflict environment, which underwriters indicate will take several weeks.
• Monitor US Treasury Department guidance closely to ensure compliance when engaging with newly unsanctioned Iranian petrochemical and crude oil entities.

• Implementation of Strait of Hormuz transit fees by Iran:
• Reduction in war-risk insurance premiums for Gulf shipping:
• IAEA verification of Iranian uranium dilution:

This assessment synthesizes reporting from Reuters, Dawn, IRNA, RIA Novosti, shipping monitors, and 40+ and additional sources across multiple languages. Items are verified through cross-referencing across language boundaries.