Despite the announcement of a deal to end the Iran conflict and reopen the Strait of Hormuz, energy experts caution that global oil and gas markets will not return to normal quickly, with supply disruptions expected to persist for months.

The agreement, reached on Sunday, has eased immediate market fears and triggered a fall in crude prices at the start of the week. Brent crude, the international benchmark, slipped by $3.45 to $83.89 per barrel, while US West Texas Intermediate fell $4.03 to $80.85 per barrel. Even with the decline, prices remain significantly higher than the pre-war level of around $70 per barrel.

Analysts say the underlying disruption to global supply chains cannot be resolved in the short term. Shipping routes through the Strait of Hormuz, which normally carry around one-fifth of the world’s oil and refined fuel supplies, were severely disrupted during the conflict, leaving tankers stranded in the Persian Gulf for more than three months.

Daniel Evans, global head of fuels and refining research at S&P Global Energy, said the recovery process will be gradual and dependent on logistical and financial conditions. He noted that insurance coverage, crew availability and safety assurances will all need to be restored before shipping activity can return to normal levels.

“There needs to be confidence that there is a safe window to bring vessels in, load them and move them out again,” Evans said, adding that restarting operations will require coordination across multiple sectors.

Even once shipments resume, the physical movement of oil remains slow. Tankers can take weeks or even months to reach refineries across global markets, meaning the impact of renewed flows will not be immediate.

Complicating the recovery further, several Middle Eastern producers were forced to halt or reduce output during the conflict due to storage constraints, a process known as shut-ins. Restarting those facilities is expected to take time, particularly in countries with more complex extraction conditions.

Alan Gelder, senior vice president at energy analytics firm Wood Mackenzie, said Gulf producers such as Saudi Arabia and the United Arab Emirates could recover more quickly due to alternative export routes. However, he warned that Iraq and other heavily affected producers may require up to a year to fully restore output.

Investment in new energy infrastructure has also been delayed by the conflict, further slowing long-term recovery. Analysts say companies are unlikely to restart major capital spending until there is confidence that stability in the Strait of Hormuz will last beyond a short-term ceasefire.

As Daniel Sternoff of Columbia University noted, uncertainty remains over how quickly normal shipping conditions can be restored, leaving the global energy market in a cautious transition phase despite diplomatic progress.

Oil prices fell sharply on Monday morning, dropping more than 5% after US President Donald Trump announced a framework agreement with Iran aimed at ending hostilities and reopening the Strait of Hormuz, a critical route for global energy shipments.

At the time of reporting, West Texas Intermediate (WTI) crude was down nearly 6% from Friday’s close at around $80 per barrel, while Brent crude, the international benchmark, fell about 5% to roughly $83 per barrel. The decline marked one of the steepest single-session drops in months as traders reacted to easing geopolitical tensions in the Middle East.

The agreement, announced over the weekend, signals a tentative path toward de-escalation in the Iran conflict. Both Washington and Tehran confirmed plans to lift respective blockades of the Strait of Hormuz, through which a significant portion of global oil supply normally flows.

However, key details of the framework remain unclear. Questions persist over implementation timelines and whether all regional actors will comply with the terms. Reports suggest uncertainty also surrounds Israel’s position, particularly regarding troop movements in southern Lebanon, which Pakistani officials say are included in the broader framework agreement.

Israeli Prime Minister Benjamin Netanyahu has not publicly commented on the deal. International media reports indicate he has sought an urgent meeting with President Trump following this week’s G7 summit to discuss the agreement and its implications.

Despite these uncertainties, financial markets responded quickly to the prospect of improved stability in global energy supplies. The expected reopening of the Strait of Hormuz has significantly reduced supply risk premiums that had been built into crude prices during the conflict.

Equity markets also rallied on the news. In Europe, major indices opened higher, with the Euro Stoxx 50 and the Stoxx 600 both gaining more than 1%. National benchmarks across the UK, Germany, Italy, Spain, the Netherlands, Switzerland, and France posted gains ranging between 0.5% and 1.5%, with France’s CAC 40 leading the advance.

US markets followed the same trend, with the S&P 500 rising more than 1.5% in early trading and the Nasdaq 100 up over 1.2%. Shares of major technology and energy-linked firms also strengthened, while newly listed SpaceX climbed roughly 8% in its first full week of trading.

Asian markets extended the global rally overnight. South Korea’s Kospi surged more than 5%, recovering losses from the previous session, while Japan’s Nikkei 225 gained around 3%. Australia’s ASX 200 rose 0.8%, Hong Kong’s Hang Seng added 0.5%, and China’s Shanghai Composite climbed over 1.5%.

Markets now await the formal signing of the framework agreement, expected later this week, which could determine whether the recent rally in global equities and the sharp drop in oil prices will be sustained.