Societe Generale has released a new analysis warning that the reopening of the Strait of Hormuz is unleashing a staggered supply shock in global oil markets. The gradual resumption of tanker traffic through the strategic waterway — which handles roughly one-fifth of the world's oil consumption — is not expected to restore normal flows immediately. The bank’s research note highlights that tanker schedules, insurance underwriting, and port logistics all require time to recalibrate, creating a complex, phased impact on crude prices and supply chains.
Simultaneously, West Texas Intermediate (WTI) crude oil prices edged above $95.50 per barrel as escalating tensions between the United States and Iran reignited fears of potential disruptions. The recent US imposition of additional sanctions on Iranian oil exports and Iran’s warnings of retaliatory measures near the strait have injected a geopolitical risk premium into crude futures. While no direct blockade has occurred, markets remain acutely sensitive to the chokepoint’s vulnerability — past estimates from the International Energy Agency suggest a full blockage could propel prices beyond $120 per barrel within weeks.
Societe Generale’s assessment notes that the staggered nature of the supply recovery could generate short-term price volatility, with downward pressure likely only once logistics fully normalize. For consumers, this means gasoline and heating oil costs may stay elevated in the near term, even as geopolitical risk premiums gradually unwind. The tight global supply backdrop, compounded by OPEC+ production cuts and steady Asian demand, further supports elevated prices. The bank advises energy investors to brace for a period of heightened uncertainty, where both bullish and bearish swings are possible.
