The USA-Iran war may leave a lasting mark on global oil markets. Even if an agreement restores traffic through the Strait of Hormuz, geopolitical risk, shrinking inventories, and uncertainty over future disruptions could keep oil prices elevated for years.
Why the oil market may never return to pre-war conditions
The USA-Iran war may have permanently altered the global oil market because any agreement eventually reached between Washington and Tehran could leave a very different landscape from the one that existed before the conflict.
A potential deal between the United States and Iran would reopen the Strait of Hormuz, while leaving the nuclear issue unresolved and bringing significant volumes of oil back to global markets. At the same time, global oil inventories, which have helped cushion the impact of the recent energy crisis, are being depleted at a record pace.
Even if an agreement is reached, restoring pre-war conditions will take time. More importantly, oil prices may continue to reflect geopolitical instability because Iran has demonstrated its ability to disrupt energy flows whenever it chooses.
Until recently, a closure of Hormuz was viewed largely as a theoretical risk discussed by analysts. Previous U.S. presidents avoided direct military confrontation with Iran partly because of that threat. The conflict changed those assumptions. Even after a diplomatic settlement, there is no guarantee that Tehran will not threaten or restrict traffic through the strait again.
A permanent geopolitical risk premium
Even after the crisis ends, markets may continue pricing in a higher geopolitical risk premium due to Iran’s strengthened strategic position.
“There will be a permanent premium on prices tied to a permanently riskier operating environment,” energy analyst Clayton Seigle of the Center for Strategic and International Studies told Axios.
In the short term, confidence in the reopening of Hormuz will depend largely on whether shipowners and crews feel safe navigating the waterway. According to UT-Austin analyst Ben Cahill, uncertainty remains over potential Iranian tariffs, security arrangements, and insurance costs.
Cahill noted that the recovery process could follow a stop-and-go pattern rather than a smooth return to normal operations.
In addition, as highlighted by the International Energy Agency in its mid-May oil market report, once mine-clearing operations are completed, it could still take two to three months before export activities are fully restored. Gulf producers will also need time to bring production levels back to normal.
The toll question
While a future agreement may not formally include a transit toll, Iranian officials could still introduce new charges on oil tankers passing through the Strait of Hormuz.
According to Edward Fishman, a former U.S. State Department official and current analyst at the Council on Foreign Relations, even relatively modest fees could generate a substantial financial benefit for Tehran. He suggested that annual revenues could reach tens of billions of dollars, potentially even USD 100 billion.
From the perspective of oil traders and shipping companies, the cost may remain manageable. For a VLCC, or Very Large Crude Carrier, the additional charge could amount to around USD 1 per barrel. Fishman argues that private operators may be willing to absorb that cost if it guarantees safe passage through one of the world’s most important energy corridors.
A permanently more dangerous Gulf?
The real stakes in any agreement with Iran may ultimately revolve around oil prices and control of Hormuz rather than the nuclear issue itself, which some analysts increasingly view as secondary.
Political scientist Robert Pape argues that if oil prices remain above USD 90 per barrel even after Hormuz fully reopens, the most important strategic outcome of the USA-Iran war may already be clear. The key question is no longer whether ships can physically cross the strait, but whether markets now believe that the Gulf has become permanently more dangerous.
If that perception takes hold, Iran may have discovered something more powerful than a complete blockade of Hormuz: the ability to reshape global power dynamics through controlled instability, without winning a conventional war.
As Pape summarized, the underlying strategic question is remarkably simple: will oil prices return to pre-war levels?
The answer, at this stage, remains far from certain.
