Oil: Extended Hormuz disruption reshapes energy outlook – Rabobank

Rabobank’s Michael Every argues that the Strait of Hormuz is unlikely to return to normal operations for up to three months, keeping a significant share of global Oil and gas flows constrained. The report highlights risks of further war, demining delays and potential NATO involvement, and warns of a looming energy crunch that will force a revision of Rabobank’s macro and commodity forecasts.

Hormuz closure drives energy crunch risks

"As such, the new base case is that, on balance, Hormuz will not return to normal operation for up to three months (before ending in a ‘disputed’ US victory) - with supply-side damage."

"However, in political terms, an oil-for-oil deal gains Iran vital FX but loosens its chokehold on the world economy, which is its leverage. Once the 1,550 ships trapped behind Hormuz exit with a huge one-off supply of energy, it would find itself in a far weaker bargaining position."

"Moreover, in physical terms, demining Hormuz could take longer than 30 days even if Iran has a better idea of where it has laid them, before drift, than the US does. Some estimates are it could take six weeks, which would already mean mid-July as an opening date."

"The second option can mean US allies helping to physically reopen Hormuz, shortening its closure timeline at the risk of more energy supply-side damage if Iran is capable of retaliation - and/or a wider conflict if it’s backed by others. Notably, on May 19 it was reported NATO members are considering playing a role in reopening the strait if it is still closed by July – which is months away, and would still require further preparation, and likely fighting, to achieve its key goals."