Experts: High Oil Prices to Remain Until Strait of Hormuz Flows Normalize

Global energy markets continue to face significant turbulence as soaring prices fuel inflation and voter frustration worldwide. While increased crude oil movement through the Strait of Hormuz and the release of emergency stockpiles offer some relief, experts suggest that a return to price stability remains distant.

Jim Burkhard, Vice President and Head of Research for Oil Markets, Energy and Mobility at S&P Global, stated that high oil prices represent the “new normal” until transportation flows through the Strait of Hormuz return to standard levels. He emphasized that the Middle East remains an irreplaceable source of global supply.

Burkhard highlighted that infrastructure damage and sky-high shipping costs present medium-to-long-term challenges. He noted a dramatic surge in tanker rates, which have jumped from $60,000 per day to over $1 million, describing the increase in transportation expenses as “really stunning.”

Following two energy crises within five years, governments are reassessing their energy security strategies. According to Burkhard, responses will vary by region depending on local resources. Some nations may prioritize increasing domestic oil and gas production, while others aim to transition away from fossil fuels entirely, resulting in a mixed global approach to safeguarding energy supplies.