Crude production in the Gulf has dropped by an estimated 14.5 million barrels per day—around 57% below pre-conflict levels—according to Goldman Sachs, which cautions that a full recovery may take longer than markets anticipate even after the Strait of Hormuz reopens.
In a note to clients, analyst Daan Struyven said output could largely rebound within a few months of reopening, but only if key conditions are met, including the absence of renewed attacks on energy infrastructure and a complete, secure reopening of the Strait.
Capacity Constraints and Operational Challenges
Goldman highlighted transport capacity and well flow rates as the main bottlenecks, estimating that available empty tanker capacity in the Gulf has already declined by roughly 50%—or about 130 million barrels—since the conflict began.
“The longer the closure, the slower the production ramp,” the bank said, noting that prolonged shutdowns can lead to reservoir issues that require technical intervention before wells can be restarted. It added that shortages of critical equipment, such as drill pipes, could further delay the recovery process.
Recovery Outlook and Risks
On a more positive note, Struyven pointed to the limited evidence of major physical damage to oil fields, as well as comments from Saudi Aramco’s leadership in March suggesting that output could be restored relatively quickly. He also noted the historical tendency of Saudi Arabia and the UAE to use spare capacity to help stabilise markets.
However, Goldman warned of meaningful downside risks. Based on an average of forecasts from the Energy Information Administration and the International Energy Agency, only about 70% of lost production may be restored three months after reopening, rising to 88% after six months.
The bank also cautioned that “the risk of large scarring to oil production capacity may pick up if hostilities were to resume,” adding that while this is not its base-case scenario, it remains a significant risk.