Even if the Strait of Hormuz fully reopens in the coming weeks, the global energy system is unlikely to return to business as usual.
Ships and boats in the Strait of Hormuz near Musandam, Oman. Photos by Reuters
Tanker traffic remains far below normal levels, insurers are still pricing war risk aggressively, and energy buyers are accelerating diversification strategies that could permanently reshape oil flows — and even weaken long-term demand growth.
Benchmark crude reflects this uneasy transition. Brent is hovering near $105 a barrel while Murban trades above $103, signalling that markets still attach a significant geopolitical premium despite partial reopening signals.The message from traders is clear: reopening the Strait is not the same as restoring confidence.
The scale of disruption has been historic. Normally about one-fifth of global oil and LNG shipments pass through Hormuz. During peak disruption phases this year, maritime traffic through the corridor dropped by as much as 90 per cent, with hundreds of vessels waiting outside the Gulf of Oman and millions of barrels diverted into floating storage as operators avoided transit risk.
According to Fatih Birol of the International Energy Agency, the Iran war has already triggered structural shifts that could reshape oil demand itself.
“The events we are seeing could have permanent implications for future oil demand growth,” Birol said recently, warning that supply insecurity is accelerating policy and investment moves toward diversification and electrification.
Shipping behaviour suggests the shift is already under way. Even during brief reopening windows, vessel flows through Hormuz have remained a fraction of normal levels.
Tanker operators continue to reroute cargoes, insurers have not restored full cover, and charter rates still reflect elevated risk assumptions.
Analysts say this mirrors what happened earlier in the Red Sea corridor after attacks near the Bab el-Mandeb disrupted Suez Canal traffic. Despite intermittent stabilisation, shipping volumes there never fully recovered because operators redesigned routes around the Cape of Good Hope instead of returning immediately to traditional lanes.
Cyril Widdershoven, senior energy and maritime adviser at Blue Water Strategy, argues the same structural shift is now unfolding at Hormuz.
“Shipping is not governed by physical access alone but by risk perception. Once reliability is questioned, traffic does not return automatically even if the Strait technically reopens,” he said.
Insurance markets remain the biggest constraint. War-risk premiums surged sharply after the withdrawal of cover by major underwriters earlier this year, effectively halting commercial navigation even when the waterway was declared open. Industry specialists say these premiums are unlikely to normalise quickly, embedding a long-term cost increase for Gulf exports.
According to Lloyd’s List Intelligence, tanker operators are continuing to factor conflict risk into routing decisions months after initial disruptions, suggesting that confidence recovery will be gradual rather than immediate.
Energy importers are already adapting. Europe has accelerated purchases from the Atlantic basin and West Africa following earlier supply shocks linked to Russia and the Red Sea crisis. Asian buyers — including India, China, Japan and South Korea — are expanding LNG sourcing diversification and strategic reserves to reduce exposure to chokepoint disruptions.
Investment patterns are shifting in parallel. Pipeline corridors bypassing Hormuz, storage infrastructure outside high-risk maritime zones and alternative export routes to the Red Sea are gaining renewed strategic urgency. Once built, such infrastructure rarely reverses direction — meaning temporary crises often produce permanent logistics changes.
Major banks say these shifts could keep oil markets structurally tighter but also accelerate long-term demand adjustments. Analysts at JPMorgan note that prolonged shipping disruptions tend to push refiners toward diversification strategies that reduce reliance on single transit corridors.
The International Energy Agency has gone further, warning that the current conflict represents one of the largest supply shocks in modern oil market history. Higher prices, supply uncertainty and transport risk are already encouraging faster adoption of efficiency measures, alternative fuels and electrification across major importing economies.
Paradoxically, the same crisis that has lifted crude above $100 could weaken its long-term trajectory.
Shipping companies appear to have already internalised this reality. Asia–Europe trade flows increasingly default to longer Cape routes, adding 10 to 14 days to voyages but offering greater reliability than contested chokepoints. Fleet deployment schedules are being rewritten around this assumption of persistent maritime volatility.
For Gulf exporters, the implications are strategic rather than cyclical. The region will remain central to global energy supply, but its dominance over marginal flows could gradually dilute as buyers diversify sourcing and logistics.
The precedent from the Suez Canal disruption is instructive. Despite incentives and partial stabilisation, traffic never fully returned to pre-crisis levels because insurers, operators and cargo owners permanently adjusted risk calculations. Hormuz now faces the same structural challenge — only at a far larger scale.
The geopolitical consequences are equally significant. Chokepoints such as Hormuz, Bab el-Mandeb and the Strait of Malacca are increasingly viewed not as stable transit corridors but as strategic pressure points capable of reshaping trade flows overnight.
The most important lesson for policymakers may be that reopening a chokepoint does not restore a system. It only restores access. Trust — once lost — returns slowly.
Even if tanker traffic resumes in coming months, insurance costs, routing patterns and procurement strategies are unlikely to revert quickly. Instead, the global energy system is moving toward redundancy, diversification and resilience — trends that could ultimately reshape oil demand growth itself.
Hormuz may reopen. But the era of frictionless Gulf energy transit is unlikely to return.
Issac John
Issac John is Managing Editor at Khaleej Times and has over 45 years of experience in top-tier newsp...