Oil production won’t return to normal until after Midterm Elections — no matter when Iran war ends, new analysis says

It could take at least seven months for the world’s oil production to recover once the Strait of Hormuz reopens, market analysts warn — meaning that higher fuel prices will likely last through the Midterm Elections no matter when the war ends.

With the traffic through the key oil chokepoint all but halted, it would take seven months “at minimum” to fully restore production to pre-war levels, the S&P Global Energy firm warned in their Tuesday report.

That prediction, however, is the optimistic version, with S&P warning that damage to energy infrastructure in the Middle East and complications from the war could add months to the timeline.

In order for the seven-months time frame to prove true, there would have to be no permanent damage to the Gulf’s energy infrastructure, and supply chains would have to operate as they did before the war began.

If those two factors fail to materialize, and if the war were to continue to leave the Strait of Hormuz shut, then the energy crisis would only be exacerbated, S&P warned.

“The longer the strait remains closed, the more likely the supply crisis extends into late 2026 and into 2027,” the firm warned.

It remains to be seen if the two factors are achievable given Iran’s mass retaliation across the Middle East in March, which targeted critical energy infrastructure in the Gulf.

The Islamic republic launched further drone strikes on Monday against the United Arab Emirates’ Fujairah Oil Industry Zone, the largest commercial storage hub for refined crude in the Middle East.

Tehran is also at risk of suffering “irreversible” damage to its own oil production fields after the US blockade of Iran’s ports has left the Islamic republic with little storage space remaining for its crude.

It also remains to be seen if the usual supply chain will be intact in the Strait of Hormuz once the war ends as Iran has vowed to assert control and force tolls of the waterway that oversees the flow of 20% of the world’s oil supply.

Iran is moving to fully establish a payment system along the strait, similar to the one Egypt operates in the Suez Canal, a move that has come under heavy criticism from oil producers in the Gulf and from buyers in Europe and Asia.

The current conflict has caused oil prices to remain volatile with crude remaining above $100 per barrel on Tuesday.

Meanwhile, the average price of a gallon of gas has jumped to $4.48, according to AAA, about 50% more than when the war began on Feb. 28.