Kpler has pushed its expectation for a reopening of the Strait of Hormuz into 2027, raising the risk of sustained higher oil prices.

Matt Smith, Kpler’s director of commodity research, gave the revised timeline on CNBC. He said there is no endgame in sight after five months of conflict.

Why the Strait of Hormuz Reopening Timeline Slipped

The United States and Iran signed a memorandum of understanding in June, reopening the strait. Tanker traffic then picked up through early July.

Smith said those flows have since slowed to a trickle. Meanwhile, US forces have continued nightly strikes on Iranian military and maritime targets.

A second chokepoint has now opened. Saudi Arabia had been routing an extra 3.25 million barrels a day into the Red Sea through Bab el-Mandeb.

Smith said that the outlet is now at risk. The Houthis declared a maritime blockade on Saudi shipping and struck two Saudi tankers two days ago.

“And there doesn’t seem like there’s an end game in sight,” Smith said. “We’re looking at our expectations for the Strait of Hormuz reopening… it’s 15 million barrels a day of crude that leaves through there. That is ground to a halt. And we’re pushing that reopening into next year.”

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Brent Climbs While Refined Fuels Take the Bigger Hit

Smith said Brent has risen about 40%, or roughly $30, over the past couple of weeks. The benchmark settled at $100.69 on Thursday, its first close above $100 since May 26. Prices then reversed. Brent fell about 4% on Friday to close near $97 after reports of revived US-Iran talks.

Refined products have fared worse than crude. Smith put diesel near $180 a barrel and gasoline near $140.

He said the concerns he raised about jet fuel in May have been addressed. However, that relief came at the expense of diesel and gasoline, and he expects those strains to worsen.

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Source: BeInCrypto