IMF: Strait of Hormuz Reopening Won't Immediately Normalize Energy Markets
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An IMF spokesperson stated that even if the Strait of Hormuz reopens following a potential deal between Iran and the US, energy markets won't see immediate normalization due to infrastructure damage and transit times for tankers.
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The restoration of navigation in the Strait of Hormuz in case Iran and the United States clinch a deal will not entail immediate situation normalization on energy markets, IMF Official Spokesperson Julie Kozack said at a briefing.
"Countries with weaker buffers, including reserves of oil and refined products, are facing a harder time at the moment, and of course, should the Strait of Hormuz open, that will be very important for the global economy, but I think it's also important to remember that with some of the infrastructure damage, it still will take time for a full opening of the Strait of Hormuz to really translate, I think, fully into positive impacts on the ground for some countries, given the time it takes for tankers to get from the Strait of Hormuz to their final destination," she said.
"We will have to understand what is the impact of infrastructure damage on production," she added.
