Oil is trickling out of the Persian Gulf as stranded tankers take advantage of the fragile détente between the United States and Iran to cross the Strait of Hormuz.
The preliminary deal signed this week by the two countries to try to end the war promised a formal reopening of the strait, a narrow waterway on Iran’s southern coast. But the agreement has brought no great flood of oil-laden ships — at least not initially.
Shipowners are eager to get out but generally remain wary of risking a journey through the strait until it is clearer that their crews will be safe. Oil producers in the area confront a similar calculus: They are ready to ramp up production but want to see evidence that a critical mass of vessels are returning to the Persian Gulf to pick up their oil. And any escalation of the regional conflict, like the violence involving Israel and Iran-backed Hezbollah militants on Friday, could deliver a blow to efforts to kick-start the flow of energy.
Still, the companies in the region that pump and distribute oil are pressing ahead with plans to expand pipelines and fuel storage. The last 16 weeks have left them keen to become less dependent on the strait.
“We are thinking seriously of having larger storage facilities all over the world,” Yasir O. Al-Rumayyan, the chairman of Saudi Arabia’s state oil giant, Saudi Aramco, said on Thursday at a conference in Rome.
This month, Sheikh Nawaf Al Sabah, chief executive of the state-owned oil company Kuwait Petroleum, said in Washington that the firm was in talks with Saudi Arabia and the United Arab Emirates about expanding the pipeline systems in those countries to move Kuwaiti barrels around the strait.
Kuwait has been among the hardest hit by the strait’s closure because its location, sandwiched between Iraq and Saudi Arabia, leaves it no alternative route for exporting its oil.
“When you look at pipelines, they are only as safe as the export facility at the end of it,” Sheikh Nawaf said, noting that during the war, Iran launched attacks on Saudi Arabia and the United Arab Emirates.
The conflict caused the largest oil supply disruption in history, and analysts said the recovery would be uneven, particularly in the Middle East. The continuing reverberations will be felt globally because the strait acts as a major artery, supplying about a fifth of the world’s oil.
Some oil has been flowing. On Thursday, 25 ships moved through the waterway, including 14 tankers, higher than the average of recent weeks, according to Kpler, a maritime data company. Some appeared to be carrying oil out of the gulf, and one of the tankers was carrying liquefied natural gas. Several empty oil tankers were returning to the gulf, presumably en route to load oil that had accumulated in storage there. Fewer ships moved through the strait on Friday amid the bursts of regional violence.
Analysts at JPMorgan Chase said in a report on June 12 that the strait was “starting to creak open,” with an estimated 5.1 million barrels of oil flowing through it a day, compared with 2.9 million barrels per day in May. Such a rebound was “meaningful” but still left flows at about 25 percent of levels before the war, the report said.
That uptick lifted Persian Gulf oil exports to nearly nine million barrels a day in June, JPMorgan Chase estimated, the highest level since the war began, with much of the oil leaving through ports that did not require transit through the Strait of Hormuz.
In Saudi Arabia, the East-West pipeline, which connects the country’s Gulf fields to export terminals on the Red Sea, was a “lifeline” for the kingdom’s economy, Mr. Al-Rumayyan said.
“All the regional producers are preparing to increase oil production and get more oil out of the strait as soon as they can,” said Greg Brew, a senior analyst with the Eurasia Group, a consulting firm.
Many shipowners remain cautious. Jerry Kalogiratos, a chief executive of Greek oil and gas shipping firms, said he was looking not only for an end to the fighting in the Persian Gulf, but also for evidence that his vessels would be able to navigate the strait safely and secure insurance to do so.
“There are still quite a few boxes to be ticked so that shipowners can say that we can safely pass,” Mr. Kalogiratos said on Wednesday at a conference in New York City.
Ensuring that the waterway is safe from mines could take weeks, experts said. Hundreds of vessels and their crews, stranded at sea for more than 100 days, need to get out. And shipping companies will need to secure war risk coverage from maritime insurers.
Also a hurdle: getting tankers back in through the strait to help drain regional storage facilities, which companies have filled to the brim.
“There are tankers in the gulf, a lot of them, which will move out, presumably,” said Robin Mills, chief executive of Qamar Energy, a consulting firm based in Dubai. “But when are they going to see enough tankers returning that they can get back to normal transits?”
Neil Quilliam, an associate fellow at Chatham House, a think tank in London, said the biggest challenge for energy markets had nothing to do with oil but with U.S.-Iranian negotiations over Iran’s nuclear program. He said it was “a stretch” to think those talks could be completed in 60 days. That means the level of risk will stay elevated.
“Persuading the shipping companies and the insurance companies that this can be sustained over a period of time will be quite complicated,” Mr. Quilliam said. “If you have anything that looks like a return to conflict, it’s going to undo any progress that’s made.”
Developing alternative routes out of the gulf will also take time. The Emirates is about halfway done with a pipeline it hopes will double its crude export capacity, with an opening targeted for 2027. Kuwait is in talks with Saudi Arabia and the Emirates to explore potential new pipelines that can connect its oil fields to export terminals outside the region.
“It’s going to be a period of prolonged instability,” said Karen Young, a senior fellow at the Middle East Institute, a think tank in Washington.
Jenny Gross contributed reporting.
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