A fragile recovery is underway in oil exports from the Persian Gulf following months of disruption caused by regional conflict, but significant challenges remain in restoring full supply through the Strait of Hormuz, a critical transit route for about one-fifth of the world’s oil.

In recent weeks, the strait has seen increased vessel traffic after a tentative agreement between the United States and Iran aimed at easing tensions and restarting oil flow. Data from maritime tracker Kipler showed 25 ships, including 14 tankers, passing through the waterway last Thursday, with a notable increase in oil shipments compared to previous weeks. Between Saturday and Monday, 109 vessels transited the strait, signaling a cautious resumption of flows. However, intermittent outbreaks of violence have kept traffic unpredictable, with fewer ships moving on some days.

Analysts at JPMorgan Chase estimated on June 12 that daily oil flow through the strait had risen to approximately 5.1 million barrels, up from 2.9 million barrels in May. While this constitutes a meaningful rebound, it remains at only about 25 percent of pre-war levels. Overall Persian Gulf exports reached an estimated nine million barrels per day in June, their highest since the conflict began, bolstered partly by shipments bypassing the strait via alternative ports.

Saudi Arabia and the United Arab Emirates have accelerated efforts to increase production and develop alternative export routes to reduce reliance on the Strait of Hormuz. Saudi Arabia’s East-West pipeline, which connects Gulf oil fields to Red Sea ports, has been described by Saudi Aramco Chairman Yasir O. Al-Rumayyan as a lifeline during the disruption. Meanwhile, the UAE is advancing construction on a pipeline expected to double its crude export capacity by 2027. Kuwait, heavily impacted by the closure of the strait, is reportedly discussing expanded pipeline connections with Saudi Arabia and the UAE to facilitate exports through safer routes.

Despite these developments, significant hurdles remain. Shipping companies and vessel operators continue to express caution, requiring assurances of crew safety and secure insurance coverage before committing to regular operations through the strait. Greek shipping executive Jerry Kalogiratos highlighted the need for clear evidence of safety and war risk coverage from maritime insurers before his fleets can resume passage. Clearing naval mines and addressing the backlog of hundreds of vessels stranded at sea for over 100 days could take several weeks.

Experts underscore that the broader geopolitical context continues to cast a shadow over oil market stability. The ongoing negotiations between the U.S. and Iran over Iran’s nuclear program were described by Neil Quilliam, an associate fellow at Chatham House, as unlikely to reach a conclusion within 60 days. The protracted diplomatic process may sustain elevated risk levels and complicate efforts to reassure shipping and insurance industries of a durable reduction in hostilities.

Observers warn that any resurgence of conflict would quickly reverse progress. “Persuading the shipping companies and the insurance companies that this can be sustained over a period of time will be quite complicated,” Quilliam said. Karen Young, a senior fellow at the Middle East Institute, characterized the coming months as likely to involve prolonged instability as regional producers and transit routes adjust to the new realities.

In summary, while oil shipments from the Persian Gulf have begun to recover incrementally, full normalization faces structural, security, and diplomatic challenges requiring coordinated efforts by producers, shippers, and governments in a volatile region.