The reopening of the Strait of Hormuz after a U.S.-Iran interim agreement is driving a notable recovery in oil exports and easing recent market losses, UBS analysts say. In a research note, UBS estimated that close to 80% of the liquids supply that had been disrupted will be restored within three months and roughly 90% will return by year-end.
UBS highlighted that Brent crude has traded below $80 per barrel as markets factor in resumed flows through the strait and producers across the region begin to ramp up output. The bank pointed to a rise in vessel transits: average oil and gas crossings through the strait have climbed to eight per day since the deal, compared with about three per day in May and June. Those figures remain well under the roughly 50 daily crossings recorded prior to the conflict.
On supply-loss estimates, UBS revised its projections lower: it now places third-quarter lost supply at 7 million barrels per day, down from an earlier estimate of 12 million barrels per day and a peak disruption of 14 million barrels per day during May and June. The note stressed, however, that bringing production back online and removing frictions in the supply chain is not instantaneous.
"Restarting production, easing insurance and freight and clearing port and terminal congestions all take time," the bank warned, underscoring logistical and commercial steps that must follow security developments.
Inventories have seen sizable draws during the period of disruption. UBS cited International Energy Agency estimates showing global draws of 74 million barrels in April and 143 million barrels in May. Those reductions, combined with disrupted flows, have tightened available stock.
UBS projects total net inventory draws of roughly 1.2 billion barrels. At a replenishment rate of 2 million barrels per day, the bank calculates it would require more than 18 months to rebuild those stocks. The forecast for the medium term was revised as well: UBS now sees a 2026 balance in deficit by 1.7 million barrels per day, followed by a return to surplus in 2027 of 3.7 million barrels per day as supply normalization progressively translates into available volumes.
Implications for markets and logistics: The supply recovery and inventory dynamics are influencing oil prices, shipping patterns through the Strait of Hormuz, insurance and freight markets, and storage refill timelines. While near-term flow resumption is easing price pressure, UBS emphasizes persistent operational and commercial frictions that could delay full normalization.