If Trump's Iran Deal Is For Real This Time, Experts Say It'll Be Months Before Gas Supply Returns To Normal

There's a chance that by the time this is published, something will have changed in the US and Iran "deal" US President Donald Trump announced over the weekend. On the chance that it doesn't though, there's still the issue of what to expect in regards to getting oil production back to normal, and experts say that could be several months away, the AP reports.

President Trump announced Sunday via Truth Social that a "Deal" will be signed Friday that will get the Strait of Hormuz moving once again. Assuming the deal is just the ceasefire, there's still a lot of negotiating to be had surrounding ending the Iran war which would hopefully leave the Strait permanently unencumbered by wartime strife. But as Iranian foreign minister Abbas Araghchi reminded media this morning, those talks are already mired by the "history of broken promises, non-compliance, and even the tearing up of agreements."

If the US and Iran even get past the first part, and sign the "Deal" and the Strait does reopen, Reuters reported there's still a likely 60-day negotiating period to follow with aim to end the war. There, the powers that be will be tested (again, because we've been through this before), and if the two sides can keep the peace while negotiating, then ships and their insurance companies can be reassured that moving cargo is not a huge liability, encouraging more ship movement in the Strait.

As peace prevails, product that was stranded in the Persian Gulf for more than three months can finally make its way towards delivery destinations. Product movement will finally allow the region's production facilities — that shut down due to lack of storage or no product mobility — to come back online. But that's only possible if countries "know there is a stable, durable strait, and that a ceasefire will last more than 30 or 60 days," Daniel Sternoff, senior fellow at the Center on Global Energy Policy at Columbia University told Reuters.

From there it could take upwards of two weeks for facilities to return to full production — or, at least, the facilities that remain intact. Another three months and the region's pre-war oil production could reach about 70%, analysts at Wood Mackenzie told Reuters. It could take six months to hit 90%, with the last 10% counting on the eventual return of damaged facilities after they're rebuilt. Those damaged in the throes of war will be part of the projected $46 billion it will take to repair them.

And all of this depends on if the deal is an actual deal and not one of the many "Deals" that have been sprung on the President's social media that goes bust days later. It could just be another dog and pony show, or a quick way to avoid what's likely to be a tense G7 summit in Paris this week.