Hormuz reopening will not immediately stabilize the energy markets, according to the IMF
The reopening of navigation through the Strait of Hormuz, should Iran and the United States reach an agreement, will not lead to an immediate normalization of conditions in the energy markets, according to IMF Official Spokesperson Julie Kozack during a recent briefing.
Kozack emphasized that countries with less robust buffers, such as limited reserves of oil and refined products, are currently experiencing greater difficulties. While the reopening of the Strait of Hormuz would be a significant development for the global economy, she cautioned that the full benefits would not be realized instantly. This is partly due to existing damage to infrastructure, which means that even after the Strait reopens, it will take time before the positive effects are felt on the ground. Additionally, the transit time for tankers traveling from the Strait to their final destinations further delays the impact.
She also highlighted the need to carefully assess the extent of infrastructure damage and its implications for production capacity. Understanding these factors will be crucial in determining how quickly and effectively the reopening can influence energy supply and market stability.
