Economists say that though the Strait of Hormuz has reopened, the effects of months of disruption will linger|eutrophication&hypoxia|CC BY 2.0
The planned reopening of the Strait of Hormuz has eased fears of a major global energy crisis, reducing the risk of a sharp economic slowdown.
However, economists warn that the effects of months of disruption will linger. Mines must be cleared, damaged oil facilities restored, and shipping confidence rebuilt before energy supplies fully normalize.
Although oil prices have fallen from a peak above $118 a barrel to around $78, higher energy costs are still expected to push up food and electricity prices in the coming months.
The US national average gas price dropped to below $4 a gallon, per AAA.
Amid these developments, Vice President JD Vance postponed a planned trip to Switzerland to discuss implementing the new 14-point US-Iran peace agreement, citing unresolved logistical issues. Iran has questioned the need for a formal signing ceremony, saying Washington should first begin implementing the deal.
The agreement extends the ceasefire by 60 days to allow negotiations on Iran’s nuclear program, while the US has lifted its blockade of Iranian ports, enabling Iran to resume oil exports.
Vance also criticized Israeli leaders on Thursday, saying they should wake up and smell reality and recognize their growing international isolation after they condemned the Trump administration’s new agreement with Iran.
Additionally, fighting between Israel and Hezbollah continues in Lebanon, raising doubts about lasting peace.