Rosemary Griffin

Iran's ramp-up in oil production and exports could be slower than that of its neighbors if a US-Iran agreement delivers lasting peace and a return to pre-war shipping levels through the Strait of Hormuz, analysts said. Unlike other Middle Eastern producers, Iran's production and export capability had already been battered by years of Western sanctions when the war began in February.

A finalized peace deal between the US and Iran would reopen the Strait of Hormuz to Middle East oil exports, but analysts caution that it will take time for flows to normalize, given the infrastructure damage sustained and the buildup of tankers that have been restricted from transiting the Gulf. Crude production from the Middle East, which accounts for about 20% of global oil supply, has plummeted since the war began.

The CEO of Russia's largest oil producer Rosneft, Igor Sechin, said June 6 that tensions in the Strait of Hormuz will keep supporting oil prices for some time, undermining long-term oil demand and triggering a renewed surge of interest in alternative energy.