The reopening of the Strait of Hormuz following the US-Iran peace agreement has eased fears of a prolonged energy crisis and pushed oil prices sharply lower. However, experts say a full recovery in supplies to India and other Asian economies is likely to take months rather than weeks.
The interim agreement signed by Washington and Tehran on June 17 reopened one of the world's most important energy routes after months of conflict. Brent crude, which had surged to as high as $115-$119 a barrel during the crisis, has since fallen to around $79-$82.
While markets have welcomed the development, analysts caution that the energy supply chain cannot return to normal overnight.
Before the conflict, the Strait of Hormuz handled between 15 million and 21 million barrels of crude oil daily, along with nearly 20 percent of global LNG trade.
At the height of the crisis, tanker traffic through the waterway fell to about 15 percent of normal levels, forcing countries to draw heavily on emergency reserves. The International Energy Agency coordinated the release of more than 400 million barrels from strategic stockpiles.
Shipping activity has now started to recover. Several Iranian supertankers carrying millions of barrels of crude have resumed exports to Asia, while Indian-flagged vessels have restarted voyages through the strait.
However, traffic remains well below pre-conflict levels. Around 25 commercial vessels crossed Hormuz on June 18, compared with a pre-war average of roughly 120 crossings a day.
A major challenge is the large volume of oil still waiting to move. According to shipping intelligence estimates, around 80 million barrels of crude remain aboard tankers in the Persian Gulf as shipowners and insurers gradually return to the region.
Energy experts note that even after normal operations resume, transporting crude from Gulf producers to Asian markets can take one to two months. Fuel inventories across Asia have also been heavily depleted and will need time to rebuild.
Countries such as China, India and other major importers are expected to replenish strategic reserves, creating additional demand even as supplies return.
The June 17 agreement is an interim memorandum of understanding rather than a permanent treaty. Although both sides have committed to restoring normal shipping through Hormuz, tensions remain.
Recent concerns that Iran might again restrict traffic through the strait briefly unsettled markets, though Tehran later clarified that commercial shipping would continue.
Analysts warn that any breakdown in negotiations could quickly revive volatility in oil markets.
India, one of the world's largest oil importers, stands to benefit significantly from the reopening of Hormuz. Lower crude prices could ease pressure on inflation, support the rupee and reduce import costs.
However, the impact will not be immediate. Economists estimate that lower oil prices typically take two to four months to filter through to consumers and businesses.
If crude prices remain near current levels, sectors such as aviation, petrochemicals, fertilisers, logistics and shipping could see meaningful cost savings in the second half of 2026.
For now, the immediate crisis appears to be over. But for energy markets, the road back to normality is only just beginning.
