--- title: "If the Strait of Hormuz Reopens, How Long Will It Take for Middle East Production Capacity to Recover?" type: "News" locale: "en" url: "https://longbridge.com/en/news/283947541.md" description: "In its latest research report, Goldman Sachs offers a cautious answer: even if the strait is cleared, it will take three months to recover only 70% of the Gulf region's production cut of up to 14.5 million barrels per day (bpd), and six months to reach 88%. With tanker capacity plummeting by 50%, well repair complexity rising exponentially with the duration of shutdowns, and irreversible changes in reservoir pressure, multiple hard constraints combined with \"scarring effects\" make this path to capacity reconstruction far longer than market expectations" datetime: "2026-04-24T06:52:37.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/283947541.md) - [en](https://longbridge.com/en/news/283947541.md) - [zh-HK](https://longbridge.com/zh-HK/news/283947541.md) --- # If the Strait of Hormuz Reopens, How Long Will It Take for Middle East Production Capacity to Recover? Even if the Hormuz crisis is resolved, structural supply frictions will still persist in the short term. According to Zhuifeng Trading Desk, Goldman Sachs' latest research report points out that if the Strait of Hormuz is fully and safely reopened within the next few months, and no new attacks hit oil assets, the approximately 14.5 million bpd reduction in the Gulf region due to war (57% below pre-war levels) **is expected to see most recovery within a few months.** However, for crude oil investors, the true point of contention lies in tail risks: if the closure of the strait extends significantly, **the final stage of capacity recovery will take longer, and may not be fully realized.** Average forecasts from external institutions show that production would recover only 70% of lost output three months after reopening, and 88% after six months. ## Core Constraints: Transport Bottlenecks and Well Physical Characteristics Once the strait is safely reopened, capacity recovery cannot happen overnight; instead, it faces three hard physical and logistical constraints: 1. **Transportation capacity for destocking:** Pipeline capacity and availability of empty vessels are key. Since the outbreak of war, available empty tanker capacity in the Gulf region has dropped sharply by about 50% (a reduction of 130 million barrels, or 130 mb). Although historical peak flows through the Strait of Hormuz once reached 23.3 million bpd (normal level is 20 million bpd), and pipeline diversions peaked at 3.5 million bpd above normal, tight transport capacity remains the primary bottleneck. 2. **Supply chain and labor:** The availability of materials and workers required for well workovers will directly affect the pace of resumption of production. 3. **Complexity of well flow rates:** Forced production cuts lead to complex changes in pressure and flow rates across different reservoir types. Before reopening, wells require intervention and workover operations to restore previous productivity as much as possible. As executives of oil services giants Halliburton and Schlumberger have stated, the longer a well remains closed, the higher the complexity of restarting it, and there is no guarantee that the same flow rate can be restored. ## Time Is the Biggest Enemy: The Longer the Closure, the Slower the Recovery **The report explicitly states that the longer the strait remains closed in reality, the longer the production cut lasts, and the slower the subsequent production recovery speed.** This delay effect is mainly reflected in three aspects: - Wells require more complex repair work. - Procurement of depleted inputs (such as drill pipes) slows down. - Destocking of backlogged inventory will occupy transportation capacity for new production for a longer period. ## Confidence in Steady Recovery: Limited Physical Damage and Spare Capacity in Key Producing Nations Despite the above constraints, Goldman Sachs still believes that capacity can achieve "most recovery" within a few months, mainly based on the following three logics: 1. **Limited physical damage:** In sharp contrast to liquefied natural gas (LNG) assets, public reports indicate that physical damage to oil fields remains very limited. 2. **Saudi Aramco's rapid response capability:** The President and CEO of Saudi Aramco stated in March that Saudi Arabia possesses ample spare capacity, and in some areas adopted measures to restrict well flow rates rather than complete closures, so production can be ramped up rapidly in "days, not weeks." 3. **Historical experience and spare capacity:** Historical supply interruption events indicate that Saudi Arabia and the UAE typically deploy their available spare capacity to stabilize markets. It is estimated that after full and safe reopening, the two countries could deploy over 2 million bpd of spare capacity. ## Long-Term Tail Risks: Reservoir Differences and Potential "Scarring Effects" For long-term investors, **it is essential to remain vigilant against the risk that full recovery may take several quarters, or only partial recovery may be achieved after a prolonged closure:** 1. Significant differences between oilfields and nations: Gulf countries differ significantly in reservoir characteristics, infrastructure maturity, maintenance levels, and sanction risks (e.g., Iran). For instance, data shows that Iran and Iraq have a higher share of production from relatively low-pressure reservoirs compared to other parts of the Gulf (nearly half of Iran's reservoirs are assessed as low-pressure), which increases the difficulty of resuming production. 2. Uncertainty in historical recovery cycles: Reviewing past production cut events, the speed and extent of production recovery vary greatly, while the current shock scale is unprecedented. 3. "Scarring risk" from renewed warfare: While this is not the baseline forecast, if hostilities resume, the risk of significant "scarring effects" (permanent damage) to oil production capacity will rise substantially, as seen in the past five largest oil supply shocks. ### Related Stocks - [BP.UK](https://longbridge.com/en/quote/BP.UK.md) - [OXY.US](https://longbridge.com/en/quote/OXY.US.md) - [UCO.US](https://longbridge.com/en/quote/UCO.US.md) - [XOP.US](https://longbridge.com/en/quote/XOP.US.md) - [XLE.US](https://longbridge.com/en/quote/XLE.US.md) - [USO.US](https://longbridge.com/en/quote/USO.US.md) - [IEO.US](https://longbridge.com/en/quote/IEO.US.md) - [IEZ.US](https://longbridge.com/en/quote/IEZ.US.md) - [XES.US](https://longbridge.com/en/quote/XES.US.md) - [BOAT.US](https://longbridge.com/en/quote/BOAT.US.md) - [IXC.US](https://longbridge.com/en/quote/IXC.US.md) - [VDE.US](https://longbridge.com/en/quote/VDE.US.md) - [OIH.US](https://longbridge.com/en/quote/OIH.US.md) - [GXPE.US](https://longbridge.com/en/quote/GXPE.US.md) - [BWET.US](https://longbridge.com/en/quote/BWET.US.md) - [CRAK.US](https://longbridge.com/en/quote/CRAK.US.md) - [BNO.US](https://longbridge.com/en/quote/BNO.US.md) - [GS.US](https://longbridge.com/en/quote/GS.US.md) - [HAL.US](https://longbridge.com/en/quote/HAL.US.md) - [W4VR.SG](https://longbridge.com/en/quote/W4VR.SG.md) ## Related News & Research - [ROI-Opening Hormuz is the easy part. 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