[FREE] A Beginner’s Guide to Reopening the Strait

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[FREE] A Beginner’s Guide to Reopening the Strait<br>Even if the Iran war ended today, rebuilding the Middle East’s energy shipping and production capacity could take months or even years.

Rory Johnston<br>Jun 04, 2026

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Audio playback is not supported on your browser. Please upgrade.Hello, Commodity Context subscribers!<br>Our latest contribution to the Dispatch Energy newsletter, A Beginner’s Guide to Reopening the Strait, is reprinted in full below. You can also listen to the story via the recorded voiceover.<br>If you enjoy this free public report you’ll love the deeper oil market research we publish regularly at Commodity Context—subscribe and join us in our hunt for ever-deeper oil market context.

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Welcome to Dispatch Energy ! For weeks, diplomatic efforts to extend the ceasefire in Iran and reopen the Strait of Hormuz have floundered, with the Islamic Republic threatening to call off talks altogether in response to the latest round of fighting between Israel and its Lebanese proxy, Hezbollah. Even if Washington and Tehran do reach another memorandum of understanding (MOU) to halt the conflict soon, fully restoring energy shipments through the strait could take months or more.<br>Regardless of whether the reopening of the strait begins next week, next month, or next year, it is valuable to think through the arduous process of unwinding the Iran war shock. Let’s dig in.

Vessels off the coast of Bandar Abbas, Iran, along the Strait of Hormuz. (Photo by AMIRHOSSEIN KHORGOOEI / ISNA / AFP via Getty Images)<br>It’s worth noting at the outset that the first ships out of the Strait of Hormuz will carry what is now effectively a stockpile, not fresh flows. Fewer than half of the 2,000 captive ships are the large merchant vessels like tankers, bulk carriers, or container ships. Only about 200 of those are tankers, down from a peak of around 250 that were initially stranded, according to tanker-tracking data from market data provider Kpler. Those roughly 200 tankers are holding an estimated 160 million barrels of (stockpiled) oil. These barrels—when successfully floated out of the strait—are frequently mistaken for “offsets” to the supply crisis. But it’s important to think about them, instead, as a stockpile: barrels that have been produced but not supplied to the market.<br>The initial surge of Hormuz exits will simply move one “stock” of oil from the Gulf to the broader market. While this, no doubt, provides some immediate supply relief, it is more equivalent to a release from one of the numerous strategic petroleum reserves in terms of the overall oil stock and flow. Meanwhile, the core flow crisis remains because 13 to 15 million barrels per day of Middle Eastern oil production capacity has been forcibly shut-in by the closure of the strait, and this production will not restart until there is sufficient export capacity.<br>We must also consider timeline and volume. Iran has pledged to facilitate a return to prewar shipping levels within 30 days of the MOU’s signing. Depending on the source (e.g., S&P Global, Lloyd’s List), this refers to the roughly 150 large merchant ships that transited the strait each day prior to the war’s opening salvoes on February 28. But this figure includes not just tankers but also bulk carriers carrying goods such as metals, food, and fertilizer. Ultimately, the pace at which stranded vessels will clear the Gulf hinges entirely on the volume that Tehran allows to cross the strait each day. And that volume will hinge entirely on whatever MOU is ultimately signed by both parties.<br>Complicating matters further is that current shipping levels are unconfirmed, which could make monitoring MOU compliance on this condition difficult. Iran has been reporting oddly high transit levels via state and social media, claiming earlier this month that 30 to 40 ships were crossing the strait each day. But tanker tracking tells a completely different story: Fewer than 10 daily transits and on some days only two. The easiest explanation for the discrepancy is that the IRGC is counting smaller vessels, which ultimately don’t move the needle on commercial disruptions. This may be an effort to show “responsible management” of the strait, but I fear these inflated numbers could be used to claim compliance in reopening the strait in the event of a deal.<br>And it’s not just Iran that is being vague about vessel counts. The U.S. has claimed that it has “guided” 70 ships across the strait over the past three weeks, largely with their automatic identification system transponders deactivated. This is a plausible figure but, again, that’s only three to four ships per day across a waterway that regularly saw 130 to 150 daily transits prewar. More substantively, it remains unclear what this “guidance” actually amounted to and, more importantly, these “dark transits” have been entirely unverified...