Brent crude futures fell nearly 5 percent to just above $83 a barrel on Monday — the lowest price since the US-Israel war on Iran began in late February — after the tentative peace deal raised expectations that the Strait of Hormuz will reopen. But energy analysts caution that consumers and businesses across the Gulf should not expect an immediate return to pre-war pricing, as supply chain disruptions and depleted inventories will take months to resolve.
Supply Chain Recovery Will Take Time
More than 14 million barrels per day of production, representing 14 percent of global demand, has been shut in during the conflict, according to the International Energy Agency. Refineries shut as a precaution could reach 95 percent capacity within 40 to 60 days, Vitol Bahrain’s head of research Bader Nooruddin told Reuters. Those damaged in fighting will take far longer, and the extent of damage to Iranian and regional infrastructure remains uncertain.
Strategic Reserves Need Refilling
John Deal, managing director of capital markets at Post Oak Group, noted that organisations including the US Strategic Petroleum Reserve will need to re-up stockpiles drawn down during the war, absorbing supply that might otherwise push prices lower. “There are a lot of companies that have to fulfil contracts that have been on hold for the last few months,” Deal said. Shipping capacity constraints, with hundreds of vessels queued at the strait, compound the problem.
What It Means for the UAE
The UAE, as a major oil exporter and OPEC+ member, stands to benefit from stabilised production. Dubai’s economy, less directly dependent on hydrocarbons than Abu Dhabi’s, still feels the ripple effects through logistics, tourism, and financial services. Analysts at ING note that while the deal is broadly positive for Gulf economies, the 60-day negotiation period between Washington and Tehran introduces uncertainty that could delay the full resumption of oil shipments. Patrick De Haan of GasBuddy said consumers may not see pre-war fuel prices until 2027, and that summer travel demand will keep a floor under prices through September at minimum. For UAE businesses navigating the recovery, the message from analysts is clear: the worst is over, but the return to normal will be gradual. The sharp drop in Brent prices on Monday offers psychological relief, but the structural imbalances built up over more than three months of disrupted supply will take considerably longer to unwind. Refiners, shippers, and traders all face a period of recalibration as the global energy system adjusts to a post-conflict reality that looks markedly different from the one that existed before February.
