"Even if the War Ends, Oil Market Recovery Will Take Several Months"

Major global oil trading firms have predicted that it will take several months for the crude oil market to recover even if the Iran war ends. They particularly expressed concerns that if the blockade of the Strait of Hormuz continues for more than three months amid the ongoing Iran war, it could trigger a global economic recession.

According to Bloomberg News on April 21 (local time), Swiss oil trading company Gunvor Group projected that global oil consumption could decline by as much as 5 million barrels per day in May. This represents about 5% of the total global supply.

Frederic Lasserre, Head of Research and Analysis at Gunvor Group, stated, "The entire supply chain will need to be readjusted," adding, "Starting from crude oil supply, it could take at least three to four months to restore supply to pre-war levels." He further noted that if the Strait of Hormuz is closed for three months, it could cause a recession in the global economy.

The impact of supply disruptions is already being seen across the real economy. Petrochemical producers in China, Japan, and South Korea are reducing operations and cutting back on plastic production used in various products. Airlines from Vietnam to the Netherlands are either canceling flights or establishing contingency plans in response. Across Southeast Asia, as fuel and fertilizer costs rise, rice paddies awaiting harvest are being left unattended.

Saad Rahim, Chief Economist at Trafigura, said at the Financial Times (FT) Global Commodities Summit in Lausanne, "People are underestimating the reduction in supply," and pointed out, "In the end, this supply gap will inevitably be matched by a reduction in demand somewhere." He added, "Adjustments are already underway, but if this situation continues, the scale of adjustment will only grow larger."

If the blockade of the Strait of Hormuz is lifted, international oil prices are expected to fall in the short term, as crude oil trapped in the region could quickly flood the market. However, since it will take time to restore production facilities, there are also projections that oil prices could face renewed upward pressure in the mid- to long-term. Even if refineries have not been damaged, it may take weeks to ramp up production, and for facilities that were attacked, the timing of expanded output remains uncertain.

Amrita Sen, co-founder and Head of Research at Energy Aspects, explained, "Damage to refineries can be confirmed through satellite imagery, but the biggest concern is how much damage has occurred underground," adding, "When it comes to actually restarting operations, that uncertainty is the greatest."

This content was produced with the assistance of AI translation services.