A framework agreement between the United States and Iran, hailed by President Donald Trump on Sunday, aims to end hostilities in the Gulf and reopen the Strait of Hormuz. While the deal, scheduled for signing on Friday in Switzerland, offers a glimmer of hope for global shipping and oil markets by lifting the US naval blockade and allowing Tehran to resume oil exports under limited sanctions relief, experts warn that a return to pre-war normalcy is far from imminent. Unlike simply clearing a highway after an accident, restoring full oil, gas, and container traffic through this critical chokepoint faces significant and protracted hurdles.
Initial De-escalation, Not Immediate Normalization
The Greek maritime risk management agency MARISKS cautioned in a Monday research note that the framework agreement should be perceived as “the beginning of a de-escalation process rather than the immediate restoration of normal trading conditions.” The agreement extends the current ceasefire for at least 60 days, paving the way for broader talks on Iran’s nuclear program, but the practicalities of resuming safe and cost-effective commercial transit remain complex.
The Minefield Challenge
A primary obstacle to safe passage is the presence of naval mines deployed by Iran during the conflict. Before shipping can safely resume, these mines must be located and cleared. Maritime experts indicate that while most could be found relatively quickly using minesweepers, underwater drones, and sonar, some may have drifted or prove difficult to detect. Independent observers will then be required to verify the waterway’s safety. This entire process could take 40 to 50 days, according to maritime security sources cited by Reuters news agency on Monday. Jakob Larsen, chief safety and security officer at shipping association BIMCO, underscored the current risks, telling Reuters that Hormuz transits would be “very risky” and advocating for the establishment of “mine-free routes.”
Prohibitive Insurance Premiums Persist
Even once the Strait is declared clear of mines, the financial burden of war-risk insurance premiums presents a major deterrent to restoring confidence among shipping firms. Current premiums remain exceptionally high, ranging from 1% to 4% of a vessel’s value per transit, a stark contrast to pre-war rates that were below 0.1%, as reported by the New York Times. For a typical $200-million (€172-million) tanker, this translates to an added cost of between $2 million and $8 million per transit, compared with less than $200,000 before the conflict. An unnamed insurance underwriter in Singapore, cited by Lloyd’s List on Monday, succinctly described the situation: premiums are “quick to go up, slow to go down.” Anoop Singh, global head of shipping research at Oil Brokerage Ltd, noted that shipowners would weigh the pros and cons based on their individual risk tolerance. Singh told Bloomberg that “The Japanese, Koreans and Chinese are less open to high risk, while the Greeks have a different appetite — so we may see some people gearing up.”
Stranded Vessels and Crewing Hurdles
The reopening of safe corridors will finally allow hundreds of commercial vessels, along with their crews, that have been stranded for months in the wider Gulf region to move. Data from commodity intelligence firm Kpler, cited by Bloomberg, indicates that approximately 300 fully loaded vessels are currently in the Gulf, with another 250 empty vessels awaiting loading once the Strait reopens. Additionally, 300 empty tankers are waiting in the Gulf of Oman for permission to enter the Gulf. Staffing these vessels presents another challenge. The UN’s International Maritime Organization estimates around 20,000 seafarers remain aboard stranded vessels. The UN agency also confirmed that 14 crew members have been killed in attacks, with about half from India, a major provider of seafarers. Amid growing reluctance among crews to accept deployments in the Gulf, India’s Directorate General of Shipping on Sunday ordered employment agencies to restrict deployments to conflict areas.
Damaged Infrastructure and Delayed Energy Flows
Gulf countries can now begin the process of ramping up oil and gas production. However, this necessitates thorough safety inspections of energy facilities, repairs to any damaged infrastructure, and the phased return of workers and maintenance crews. A full restart of energy exports hinges on restoring shipment schedules, securing sufficient tankers, and, critically, convincing international buyers of the renewed reliability of energy flows. Neil Shearing, group chief economist at UK-based Capital Economics, projected on Monday that it would take until the end of September for approximately 80% of energy flows through Hormuz to resume. Shearing specifically warned that natural gas flows “will be slower to return,” citing significant damage to Qatar’s Ras Laffan liquefied natural gas hub, where attacks knocked out about 17% of the country’s export capacity, likely for several years.
Persistent Geopolitical Risks
The framework agreement itself is merely an outline, leaving major issues unresolved and posing ongoing geopolitical risks. The US insists on a permanently toll-free strait, while Iranian officials have spoken of “service fees” and maintaining control of the waterway, alongside neighboring Oman. Broader contentious issues, including Iran’s nuclear ambitions, comprehensive sanctions relief, and Tehran’s support for groups like Hezbollah and the Houthis, remain unaddressed. Analysts therefore see a real risk of further attacks. Iran, potentially emboldened by its leverage over the Strait of Hormuz, may continue to test boundaries. Furthermore, Israeli Prime Minister Benjamin Netanyahu has explicitly stated that his country is not bound by the agreement, warning that Israel will continue to act in self-defense. Such unilateral actions could quickly unravel the fragile framework, plunging the region back into instability and further delaying any semblance of normal shipping operations.
