Iran Tensions Keep Gulf Flows at Risk

Summary

Clara Gillispie, Senior Fellow at CFR, discusses the fragile state of Gulf energy flows following Iran tensions. She explains the wide range of forecasts—from a potential recovery by end of year to a permanent disruption—and outlines the four critical tasks needed to restore flows. The Strait of Hormuz remains unstable, with shipping below pre-war levels and clandestine tanker movements, while repair costs run into tens of billions. US sanctions pressure on Iran further clouds the outlook.

• Gulf energy flows face an uncertain recovery with projections spanning renormalization to permanent disruption.
• Four key tasks: clearing ships, bringing in empty tankers, restarting production, and repairing multibillion-dollar damage.
• Strait of Hormuz shipping remains below pre-war levels; some tankers attempt crossings clandestinely.
• Qatar LNG plant restart was halted after an Iranian forces fired on an LNG tanker.
• Repair costs are estimated around $60 billion.
• US administration has shifted from carrots to sticks, lifting the waiver that allowed Iran to sell oil on the open market.
• The stability of the region remains extremely fragile with little clarity on safe passage guarantees.