In the delicate dance of global energy markets, even the reopening of a crucial sea lane may not bring the kind of relief many hope for. The U.S. Energy Information Administration (EIA) — the independent statistical arm of the U.S. Department of Energy — has issued a cautionary forecast that could temper expectations among consumers and policymakers alike. According to a new short‑term energy outlook, fuel prices could remain elevated for months even after the reopening of the Strait of Hormuz — the world’s most important oil transit chokepoint.

The Strait of Hormuz, a narrow channel between the Persian Gulf and the Gulf of Oman, typically carries about one‑fifth of the world’s traded crude oil and liquefied natural gas. Its closure earlier in 2026 amid the conflict involving the United States, Israel, and Iran sent shockwaves through global supply chains and energy markets, triggering sharp increases in crude and refined fuel prices. The EIA’s latest figures suggest that these effects will not simply vanish once the waterway reopens.

Markets have already felt the impact. Global benchmark Brent crude is now forecast to average about $96 per barrel this year, significantly higher than pre‑conflict projections. U.S. gasoline prices are expected to average over $3.70 per gallon, peaking near $4.30 in April, while diesel could reach an average of about $5.80 per gallon — levels that weigh heavily on household budgets and transport costs.

One key reason prices may stay high is that reopening the strait will not immediately restore normal oil flows or rebuild global inventories. Years of disrupted shipping, shut‑in production, and reduced refinery activity mean that markets will likely feel persistent supply tightness. Moreover, the uncertainty surrounding future conflicts or blockages adds a risk premium that keeps crude prices elevated even in the absence of immediate physical disruptions.

The EIA notes that fully restoring commercial shipping through the strait “will take months,” and the broader economic impact of earlier supply disruptions — including curtailed production in several Gulf countries — will continue to ripple through markets. Analysts also point out that fuel prices are influenced by not just physical supply but global demand dynamics and inventory drawdowns, pushing prices higher even when transportation routes reopen.

This forecast also diverges from more optimistic political messaging that suggests markets will quickly calm once the conflict ends. The EIA’s outlook underscores the complexity of global energy systems: supply disruptions, risk premiums, and market psychology can keep prices high long after headline risks recede.

For consumers, this means pump prices may not fall soon, and for governments, that fiscal pressures tied to energy costs could persist. Even as diplomatic efforts continue and shipping lanes potentially reopen, the energy sector is bracing for a period of extended volatility and higher costs, reflecting the long shadow cast by geopolitical conflict on global markets.

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Sources : Reuters The Straits Times (via Reuters reporting)