20 million barrels exit Hormuz in 24 hours as oil flows resume

The Strait of Hormuz is moving oil again at a pace that caught the market off guard.

Some 20 million barrels of crude oil cleared the Strait of Hormuz in the past 24 hours, U.S. Energy Secretary Chris Wright said Wednesday, a volume that matches the waterway's pre-disruption daily throughput and points to a faster-than-expected recovery after months of conflict.

"The reopening is proceeding more quickly than many anticipated," Wright said at the Reuters Global Energy Forum in New York. The statement comes less than two weeks after the U.S. and Iran signed a 14-point memorandum of understanding aimed at ending hostilities and reopening the strait to all traffic.

Brent crude traded at $79.46 a barrel on June 18, down roughly 30 percent from $112.93 a month ago, yet prices have not fallen further despite the reopening. Around 500 commercial vessels remain stranded inside the Persian Gulf, according to maritime intelligence firm Kpler, and the narrow strait cannot clear them at once. The Energy Information Administration's June outlook assumed Hormuz stays effectively closed through most of the summer.

The rapid return of flows challenges that assumption and could accelerate the timeline for oil prices to shed their remaining geopolitical risk premium. Capital Economics estimates energy flows could reach 80 percent of pre-war levels by September, though Iraq's deeper-shut fields may need close to a year to fully recover.

Pipelines Gain Urgency

TotalEnergies SE Chief Executive Officer Patrick Pouyanné said the months-long disruption has forced a fundamental rethink of global energy infrastructure, arguing that new export pipelines bypassing the strait must become a top priority. Roughly a fifth of global oil supplies normally transit through the narrow chokepoint.

"The reality is that the Strait of Hormuz represents a genuine threat, so we must act," Pouyanné said at an energy conference in Paris on Tuesday. "To ensure it doesn't remain a threat, there is only one solution: we must invest in pipelines to bypass the strait."

Pouyanné highlighted several potential routes, including expanding export corridors from Abu Dhabi and Iraq, as well as developing links through Syria and Turkey to Mediterranean ports. He noted that Total's predecessor companies discovered oil in Iraq in 1928 and subsequently built an export pipeline to Syria, allowing crude to reach Mediterranean markets and European refineries.

Residual Risks Remain

The situation remains fluid. On Friday, the Persian Gulf Strait Authority posted a notice requiring vessels to submit passing requests 48 hours before arriving in the strait area, along with mandatory PGSA-approved insurance. The insurance carries no fee during a 60-day toll-free window, but charges may be imposed after that period.

President Donald Trump has threatened to impose American-administered tolls in the waterway if a final deal with Iran is not reached within the 60-day timeframe, saying the money would be for "services rendered as the Guardian Angel to the countries of the Middle East."

Claudio Galimberti, chief economist at Rystad Energy, cautioned that sentiment is not the same as supply. "It will take time for production to ramp back up, for logistics to normalize, and for the risk premium embedded in crude prices to dissipate," he said.

Restarting oil fields shut in for over three months is not a switch that flips overnight. The ongoing U.S. Navy presence in the Gulf, combined with uncertainty over Iran's compliance, means traders have not fully priced out the possibility of renewed disruption. That residual risk premium is acting as a price floor, keeping Brent above $75 even as supply returns.

This article is for informational purposes only and does not constitute investment advice.