Rystad Energy: Oil Market Will Need Two Months to Restore Supply
Even if the US and Iran reach a deal, an immediate surge in oil supply won't happen due to logistics and the need to restart shipments through the Strait of Hormuz.
Rystad Energy warns: why a two-month supply delay is a collapse scenario for the oil market, not just a logistics issue
The Gist: What's Really Happening
Rystad Energy has issued a sobering statement: even if the US and Iran sign a peace agreement, physical oil supplies won't recover instantly, and meaningful volume restoration won't occur before June, with cargoes reaching processing ports only after an additional 4-6 weeks. Rystad's chief oil analyst, Paola Rodriguez-Masiu, emphasizes that this is not a conservative estimate but a structural characteristic of shipping markets. However, what the market perceives as a "slow recovery" is actually a time bomb. The world has lost approximately 600 million barrels of oil since the conflict began, and cumulative losses could reach 2 billion barrels before flows fully normalize. Global inventories have shrunk by at least 500 million barrels. The US Strategic Petroleum Reserve has fallen to its lowest level since 1982. Now the key question is not when the strait will reopen, but whether physical oil can reach refineries before the buffers that mask the scale of the disaster run out.
Timeline and Context
Since late February 2026, when military actions in the region led to a blockade of the Strait of Hormuz, the world has faced the largest supply disruption in oil market history. The Strait of Hormuz is not just a point on the map but an artery through which about 20% of global seaborne oil and 20% of global LNG volumes pass. Tanker traffic has collapsed by over 90%, disrupting supplies of roughly 10 million barrels per day. Global seaborne crude oil shipments have fallen by about 16%, amounting to around 7.6 million barrels per day.
The first weeks of the crisis were weathered thanks to three "safety cushions": strategic reserves (the IEA coordinated the release of 400 million barrels), commercial inventories, and oil aboard tankers that managed to leave the strait. But analysts note that the problem is starting now. OPEC+ spare production capacity has fallen to a record low of 320,000 barrels per day. Inventories are depleting, and from May onward, supply disruptions will materialize in full force. Even if a miracle happens and shooting stops tomorrow, the inertia of the physical market guarantees that the deficit will grow for weeks.
Who Wins and Who Loses
Winners: Tanker owners. Over the last 2 months, freight rates have skyrocketed: before the blockade, a tanker could be chartered for $50,000 per day, now for $420,000, a 740% increase. Freight costs have risen 11-12 times. For shipowners willing to take risks, this is a goldmine. Given that some shipping companies are reportedly paying $1 to $2 million per vessel for "safe passage," the risk premium is built into the tariff.
Winners: Oil futures speculators. Volatility is extreme: WTI trades in a range of $80 to $97 per barrel, reacting to every rumor of a ceasefire or its breakdown. For traders with access to insider information, who open short positions an hour before peace news and long positions before escalation, this is an ideal market.
Winners: Insurance companies. War risk premiums have surged from 0.2-0.25% to 1-3% of the vessel's value, and for some extreme voyages reach 7.5-10% — a 30-fold increase. Insuring a large tanker worth $138 million could now cost up to $14 million instead of $345,000.
Losers: Oil refineries and end consumers. Refineries worldwide, especially in Asia, dependent on Middle Eastern oil, will face physical feedstock shortages. This will fuel a "procurement war" for the remaining oil on the market, which, as Korea Investment & Securities analyst Lee Chun Jae predicts, will push prices up by at least another $20-30 per barrel.
Losers: Global majors and physical oil traders. Those who have contracted oil supplies at old prices. As noted in legal reviews, the Strait of Hormuz crisis is stress-testing oil service company contracts. Missed deadlines, delivery delays, and rising insurance costs are planting a bomb under suppliers' financial models. Exxon Mobil warns that clearing bottlenecks and restoring supply chains will take one to two months.
What the Media Isn't Saying
First insight: The buffers are gone, and a "domino effect" is about to begin. The main media narrative focuses on the Brent price or US-Iran talks. But oil market insiders are watching the inventory drawdown chart. The world has burned through 500-600 million barrels from storage. The US SPR is "teetering on the edge of its lowest level since 1982." OPEC+ spare capacity is a meager 320,000 barrels per day. This means that if physical flow doesn't resume in the coming weeks, panic will set in: refineries will offer any price to get some oil. The market is pricing in peace, but not pricing in the depletion of the "safety cushion" before peace arrives.
Second insight: The seizure of oil tankers near the Strait of Hormuz is not just an incident; it's a new "tariff" and weapon. The May 5-6 incident involving the CMA CGM Everglade container ship, which was fired upon in the strait despite Iran declaring it open, showed the true cost of "peace." Reports that shipping companies are paying $1-2 million per vessel for "safe passage" directly to Iranian entities mean that even after a hypothetical ceasefire, any vessel will be a target for extortion. The insurance market is paralyzed not only by the risk of missile strikes but also by the unpredictability of political risks.
Third insight: Restarting supplies will actually take much longer than two months. Rystad Energy's two-month estimate is an optimistic scenario with a "30-day phased reopening." But what if the reopening is not phased? If after a few voyages another attack occurs, insurers will again withdraw coverage, and traffic will halt again. This is a vicious cycle. The market stops believing in long-term security, and "commercial trust cannot be restored overnight." We could see a situation where the strait is formally open, but tankers don't enter without a military convoy and payment of "tribute" to Tehran.
Forecast: Next 30 Days and 90 Days
30 days (May to mid-June 2026):
Pressure will peak. Inventories will shrink to about 98 days of consumption. Fierce competition for remaining free barrels will begin. Brent could easily test levels of $130-140 per barrel, as analysts predict. If physical tanker movement through the strait doesn't start by mid-June, we will face the first wave of refinery shutdowns in Asia. The futures market will try to ignore this amid peace news, but the physical market will force it to wake up.
90 days (through August 2026):
By this point, the moment of truth will arrive. If a deal is reached soon, the first significant volumes of physical oil will hit the market just in time for August. This will bring prices down from their peaks. But here lies the main danger: by then, global inventories will be depleted. It will take months and years to replenish them. TotalEnergies and Goldman Sachs are already sounding the alarm: "even if the conflict ends in May, the world will be left with very low inventories." This will create a structural deficit for years to come.
The bottom line: The market is like a driver who sees a concrete wall ahead and is happy that the accelerator isn't floored. Rystad Energy's forecast of a "delay" masks the reality that this delay guarantees the physical oil market crisis will last until autumn, and its price consequences will be felt throughout the next year. Current "low" oil prices are an illusion gifted to the market by speculators on peace talks, and it will dissipate as soon as refineries start fighting for every remaining barrel in stock.
— Editorial Team
