analysts

Even though a fragile ceasefire between Iran and the United States and Israel has been announced, it’s going to be a long time before prices of oil and gas come back to pre-war levels, experts say.

In response to the US-Israeli attacks, Iran choked off the Strait of Hormuz, the narrow channel linking the Gulf to the Gulf of Oman, through which roughly 20 percent of the world’s oil and gas exports pass from the Middle East, mainly to Asia and also to Europe.

It also attacked energy infrastructure in several Gulf countries, leading to soaring prices of not just energy but also of byproducts like helium, used in a range of products like tiles used in homes and semiconductor equipment. Fertilisers that rely on some of these inputs were hit too, impacting sowing seasons.

As a result, consumers the world over, but particularly in developing countries of Asia and Africa, have felt the brunt of those shortages and soaring prices. The question on many minds: Now that there is a ceasefire in place, how quickly will prices normalise?

“Anyone who tells you they know the answer to that question is lying,” said Rockford Weitz, professor of practice in maritime studies at The Fletcher School at Tufts University. “It’s too early to tell when we return to normal.”

There needs to be a predictable and stable flow of cargo through the strait before markets can stabilise, experts say.

“What we’re seeing is the biggest disruption in the history of global oil markets,” said Weitz.

Before this conflict, approximately 120-140 ships passed through the Strait of Hormuz every day. On Wednesday, only five vessels crossed the strait, while seven passed through the waterway on Thursday.

That shows why “to get back to normal is going to be a while”, Weitz told Al Jazeera. “And it’s too complicated to know at this stage when that will happen, as it requires collaboration with the great powers [US, China and Russia], but also regional powers [UAE, Saudi Arabia, India and Pakistan]. It’s hard to say when it will end, as there are so many parties who can make it not happen.”

There is also some concern that developments, like Iran charging a toll fee to allow ships to pass through and skyrocketing insurance fees, will keep oil prices high.

“There are reports that Iran is charging fees to tankers going through the Hormuz Strait,” US President Donald Trump wrote on TruthSocial Thursday.

“They better not be and, if they are, they better stop now.”

But experts agree that those fees, rumoured to be about $2m per vessel, are not enough to move the needle on oil prices.

“What is causing oil prices to rise is not insurance. It’s about getting tankers through. Tolls won’t be the cost driver,” said Weitz.

‘Signs of strain’

Some of that reality was on display with the reopening of the strait, showing “signs of strain just hours after the ceasefire was announced”, said Usha Haley, W Frank Barton Distinguished Chair in international business at Wichita State University.

Compounding that problem was the fact that some countries, including Iraq, had shut down production because of limited storage capacity, further taking oil supplies offline.

“That will take weeks and months to reopen,” Haley added.

“It’s going to be a contested reopening … LNG [liquefied natural gas] will take months to rebalance because of the hits to infrastructure, and can take three to six months to normalise if everything else remains normal. And it’s not.”

Slower growth

On Thursday, International Monetary Fund managing director Kristalina Georgieva warned that the fund will downgrade its forecast for the world economy next week from the current expectation of 3.3 percent. “Growth will be slower – even if the new peace is durable,’’ Georgieva said.

While the war has hit most economies, “it hasn’t really affected the two primary [US] targets – Russia and China. Russia, in fact, has benefitted enormously, and Chinese ships have been allowed to go through,” said Haley.

The US has hit Russia with multiple sanctions for its war on Ukraine, including capping sales of Russian oil to undercut its income stream. Similarly, the first Trump administration put tariffs on China and curbed US exports of certain high-end technology, measures that were held up under the administration of former US President Joe Biden and further ratcheted up by Trump last year with his tariffs blitz.

But amid the war on Iran and the effective closure of the Strait of Hormuz, the US temporarily eased some sanctions on Russian oil, and countries desperate for crude have since paid far higher prices to Moscow than the subsidised energy that President Vladimir Putin’s government was previously offering them.

“We [the US] really need to decide what we want to do long-term, who our targets are. There’s got to be some coherence to what we want to do.”

For now, “an overhang of greater risk premium of supplies out of the Gulf means oil prices will remain higher than what they were before the attack started”, said Rachel Ziemba, adjunct senior fellow at the Center for a New American Security.

While it’s possible that some of the blocked oil and oil products could be released soon, providing a short boost of supplies in the coming days and weeks, “that would be a temporary support” and is still conditional on the ceasefire holding and converting to a broader deal, said Ziemba.

For now, she’s keeping an eye on Iraq to see if it strikes a side deal with Iran. Iraq, long a proxy battleground between the US and Iran, can produce at least 3.5 million barrels of oil per day, production that it had shut off because of limited storage capacity, said Ziemba.

Should that come back online, it will help oil flows and, eventually, prices. But the uncertainty of the truce and the history of attacks on Iraq mean that the future of the country’s oil production remains unclear. “In that environment, who wants to invest in scaling up production?” Ziemba wondered.

Watch this discussion between Ross Harrison and Hassan Ahmadian on US strategy regarding Iran. They conclude the US is still negotiating with old talking points, while Iran has moved on.

Rights groups have slammed United States Secretary of Defense Pete Hegseth for saying that “no quarter” will be shown to Iran, as the US and Israel continue their military campaign against the country.

“We will keep pressing. We will keep pushing, keep advancing. No quarter, no mercy for our enemies,” Hegseth told reporters on Friday.

Under the Hague Convention and other international treaties, it is illegal to threaten that no quarter will be given.

Domestic laws, such as the 1996 War Crimes Act, also prohibit such policies. US military manuals likewise warn that threats of “no quarter” are illegal.

Brian Finucane, a senior adviser at the International Crisis Group, a think tank, said Hegseth’s comments appear to run afoul of those standards.

“These comments are very striking,” Finucane told Al Jazeera over a phone call. “It raises questions about whether this belligerent, lawless rhetoric is being translated into how the war is being conducted on the battlefield.”

But Hegseth has publicly dismissed concerns about international law, claiming he would abide no “stupid rules of engagement” and no “politically correct wars”.

His rhetoric has provoked concern among some experts that measures designed to prevent civilian harm are being ignored in favour of a campaign of “maximum lethality”.

Hegseth’s remarks also come after a US strike on a girls’ school in southern Iran that killed more than 170 people, most of them children. The war has left at least 1,444 Iranians dead and millions more displaced.

‘Inhumane and counterproductive’

Prohibitions against declaring “no quarter” go back more than a century, part of an effort to impose restraints on conduct during war.

The Nuremberg trials after World War II upheld that legal standard, as Nazi officials were prosecuted, in some cases, for denying quarter to enemy forces.

“The basic idea is that it’s both inhumane and counterproductive to execute people who have laid down their arms,” said Finucane.

He added that the “mere announcement” of “no quarter” from a government official can itself be a war crime.

The US and Israel have already faced allegations of violating international law during their war against Iran. Experts have condemned their initial strike on February 28 as “unprovoked”, deeming the conflict an illegal war of aggression.

Iranian officials also protested after a US submarine sank a military vessel, the IRIS Dena, off the coast of Sri Lanka, as it returned from a ceremonial naval exercise in India. That attack killed at least 84 people.

While warships are considered legal military targets, Iran has said that the ship was not fully armed, raising questions about whether it could have been interdicted rather than sunk.

US forces also purportedly declined to help rescue sailors from the Dena, even though the Geneva Convention largely requires aid to the shipwrecked. The Sri Lankan navy ultimately helped collect survivors from the wreckage.

Responding to the attack, Hegseth described the sinking of the ship as a “quiet death”. He also told reporters, “We are fighting to win.”

US President Donald Trump himself remarked that he asked why the ship had been sunk, not captured.

“One of my generals said, ‘Sir, it’s a lot more fun doing it this way,’” Trump said.

‘Serious red flag’

The US military has faced criticism for killing civilians in military operations for decades.

That includes during the so-called “global war on terror”, when airstrikes resulted in thousands of civilian deaths, including a 2008 attack on a wedding party in Afghanistan.

Even before the war with Iran, the Trump administration had faced accusations that it violated international law by attacking alleged drug-trafficking vessels in the Caribbean Sea and eastern Pacific Ocean.

At least 157 people have been killed in those attacks since they started on September 2.

The Trump administration, however, has never identified the victims nor presented evidence against them. Scholars have condemned the attacks as a campaign of extrajudicial killings.

Analysts say that the Pentagon’s policies of emphasising lethality at the expense of human rights concerns has carried over into its war against Iran.

“Death and destruction from the sky all day long. We’re playing for keeps. Our warfighters have maximum authorities granted personally by the president and yours truly,” Hegseth said during a briefing on March 4.

“Our rules of engagement are bold, precise and designed to unleash American power, not shackle it.”

Sarah Yager, the Washington director at Human Rights Watch, called such rhetoric alarming.

“I’ve been engaging with the US military for two decades, and I’m shocked by this language. Rhetoric from senior leaders matters because it helps shape the command environment in which US forces operate,” Yager said.

“From an atrocity-prevention perspective, language that dismisses legal restraints is a serious red flag.”

While the impact of Hegseth’s rhetoric on combat operations is not certain, a recent report from the watchdog group Airwars found that the pace of the US and Israeli assault on Iran has far outstripped other military operations in modern history.

Reports indicate that the US dropped nearly $5.6bn worth of munitions in the first two days of the war alone. Airwars says the US and Israel hit more targets in the first 100 hours of the Iran war than in the first six months of the US campaign against ISIL (ISIS).

Following Hegseth’s remarks on Friday, Senator Jeff Merkley condemned the Pentagon chief as a “dangerous amateur”. He cited the attack on the Iranian girls’ school as an example of the consequences.

“His ‘no hesitation’ engagement rules set the stage for failing to distinguish a civilian school from a military target,” Merkley wrote in a social media post.

“The result, more than 150 dead schoolgirls and teachers from an American missile.”