Global oil markets could take as long as a year to return to something like pre-Iran war normality even if the conflict ended tomorrow, leading experts warn.<\/p>\n
Hopes for an immediate restart of shipping through the strait of Hormuz have been dashed after Israel bombarded Lebanon<\/a> shortly after the announcement of a two-week cease-fire between the US and Iran, with Iranian media reporting traffic through the strait had been halted<\/a> in response.<\/p>\n Following the mid-week news of the deal, the global benchmark oil price, Brent crude, plunged by about $US20 a barrel and towards $US90 \u2013 its biggest drop in six years \u2013 but has since climbed back above $US97 a barrel.<\/p>\n Analysts warned that the past 48 hours have revealed how far off a negotiated end to the war remained.<\/p>\n Helima Croft, head of global commodity strategy at RBC Capital Markets, said Gulf countries were opposed to a formalised toll arrangement with Iran\u2019s armed forces to allow shipping through the strait, one of the country\u2019s initial proposals for a ceasefire deal.<\/p>\n \u201cAbove all, we think the mechanics of reopening the strait will be exceedingly messy, with Iran potentially having a vote on nearly every barrel that exits the waterway until Gulf countries can build more alternative access routes,\u201d Croft said.<\/p>\n Ahead of a 12 May budget that is expected to include additional cost of living support for households and businesses hurt by the fuel crisis, Jim Chalmers on Thursday recognised that \u201cthe economic consequences of the war in the Middle East will still be felt for some time yet\u201d.<\/p>\n \u201cFirst of all, we need to see the strait [of Hormuz] reopened, we need to see the ceasefire stick,\u201d the treasurer said.<\/p>\n After which, \u201cwe\u2019ll need to do a proper assessment, for example, on the damage done to oil and gas infrastructure in the Middle East\u201d.<\/p>\n Robert Rennie, head of commodity strategy at Westpac, agreed that the impact of the war would outlast the end of hostilities.<\/p>\n Sign up for the Breaking News Australia email<\/a><\/p>\n \u201cEven if we do manage to hold a stable ceasefire with a coordinated reopening of the strait of Hormuz, it will take months before shuttered wells are reopened, crews and vessels are in the right places, refineries are fully repaired and restocked, and fuels shipped to the countries that really need it,\u201d Rennie said.<\/p>\n While fuel retailers were quick to hike prices following the first US-Israeli attacks on Iran at the end of February, lower global oil prices this week are yet to be seen<\/a> at the bowser.<\/p>\n