Oil Supply Resumes Through The Strait Of Hormuz, But Recovery Could Take Months

New Delhi: The peace agreement that emerged after the US-Iran conflict that lasted for nearly three months has given great relief to the global markets. Announcing the agreement, US President Donald Trump indicated that the Strait of Hormuz, the world's most important sea route for energy supply, will soon be fully opened. After this development, there has been a rapid change in the oil markets, but experts say that it may take several months for the impact on the supply chain and the global economy to subside.

What changed in the markets after the agreement?

As soon as the news of the agreement between America and Iran came out, international markets reacted positively. Brent crude prices fell and Asian stock markets witnessed a rise. Investors hope that normalization of oil supply will reduce the pressure of the energy crisis and provide relief to the global economy.

How much was the supply chain affected?

During the conflict, the movement of many tankers carrying oil and gas in the Persian Gulf was affected. Many ships had to take alternative routes, while some had to wait at ports. After the agreement, the movement of these ships is set to resume, but it may take time for the entire system to become normal.

What was the impact on the fertilizer and gas market?

The impact of the supply of fertilizer, LNG and petrochemical products from West Asia was visible in Asian countries. Prices increased and supplies decreased in many markets. Now after the opening of the route, exports are expected to resume.

Why is Hormuz important for India?

India imports most of its crude oil needs. A large part of the goods coming from countries like Saudi Arabia, Iraq, UAE and Kuwait pass through this sea route. In such a situation, with the opening of Hormuz, there is a possibility of smoothening of oil supply and reduction in transportation costs.

Will people get immediate relief?

Officials associated with the energy sector say that after the agreement the situation may start improving, but it will take some time for the regular movement of ships and the supply network to become completely normal. Its effect may be visible in the markets in the coming months.

Has the danger been completely averted?

Experts say that the picture of relief will be permanent only if there is peace in the area. If tensions rise again in West Asia, energy markets and global supply chains could be affected once again. At present, the world is keeping an eye on how successful the agreement between America and Iran proves to be on the ground.