The International Monetary Fund (IMF) warned that global oil flows could take two to three months to return to normal after the Strait of Hormuz fully reopens to navigation, following a blockade announced by Iran amid renewed escalation in the Middle East.
The IMF expressed concern about possible lasting reductions in crude supply. Industry estimates cited by the fund indicate that it may take two to three months before a significant portion of oil flows can resume after the strait is completely reopened.
The IMF highlighted the risks posed by prolonged production disruptions, particularly where a lack of financing makes it difficult to restart oil wells. It noted that a provisional peace accord between the United States and Iran had helped push oil prices down because of the volume of crude stored on waiting ships, but warned that the recent escalation is again putting pressure on supply.
The IMF emphasized that many uncertainties remain, including the timing for a full restoration of navigation through this critical oil chokepoint and how quickly shippers, insurers and operators will regain confidence, according to its latest statement.
The energy disruption linked to the conflict in Iran has affected oil supply in an unprecedented way. However, higher prices reduced demand, increased production outside the Middle East and existing inventories helped mitigate some of the impact. The IMF urged policymakers to restore reserve levels to those that prevailed before the conflict, calling this essential preparedness for future crises.
The fund also warned that reliance on a single critical transit point leaves the global economy vulnerable and underscored the need to diversify energy sources, including renewables. It said that market flexibility and swift policy responses have eased pressures on the global economy, and that a durable agreement between the United States and Iran would allow supply to recover. Nevertheless, substantial efforts are still required to boost resilience and diversify energy supplies to prevent oil shocks from destabilizing the world economy.
On Tuesday, ahead of the IMF’s trade forecast, the U.S. Treasury Department announced sanctions against more than 50 individuals, entities and vessels allegedly involved in illicit maritime transport and sanctions evasion, in response to the recent escalation of hostilities in the Middle East. The action aims to increase economic pressure on Tehran and dismantle a network linked to Mohamad Hosein Shamjani.
The Office of Foreign Assets Control (OFAC) said it seeks to disrupt and weaken the illicit maritime transport and sanctions-evasion network associated with Mohamad Hosein Shamjani, an Iranian oil magnate, and to reinforce pressure on Iran after the resumption of what it called destabilizing attacks in the Strait of Hormuz.
“The Treasury Department is dismantling the financial infrastructure that allows the regime to continue threatening U.S. national security and global maritime transit,” said Treasury Secretary Scott Bessent, describing the Shamjani network as one of the regime’s most profitable engines.
The action increases to more than 200 the total number of persons, entities and vessels sanctioned in connection with this network. Those targeted include Hoseín Qorbani Zahed and Mohamad Reza Rahbar Madani, accused of providing currency exchange services to shell companies, and Ali Rajbarmadani, a dual Iranian-Russian national identified as a close business associate of Shamjani.
Also highlighted is Sea Lead Shipping PTE. Ltd. (Sea Lead), based in Singapore, along with its subsidiaries in Dubai, the Marshall Islands and India, which U.S. officials consider central to the network’s container shipping operations.
As a result of the designations, all property and property interests of the listed persons and entities that are in the United States or under U.S. jurisdiction are blocked and must be reported to OFAC. In addition, all transactions by U.S. persons or originating in the United States that involve the property of the sanctioned parties are prohibited unless expressly authorized.
(With information from Europa Press)