Even if the Strait reopens tomorrow, the shock to the global economy will persist for a long time.
The tanker war between the US and Iran has led to a prolonged blockade of the Persian Gulf, with the restoration of oil transport potentially taking months or even years. As a result, Brent crude prices have surpassed $100 per barrel.
In the early days of the Iran conflict, thousands of oil wells across the Middle East were forced to shut down within a matter of days. The extended closure of the Persian Gulf to shipping means a full recovery of energy flows will require months, or even years.
Due to the US-Iran tanker standoff and a complete halt in diplomatic negotiations, shipping traffic inside and outside the Persian Gulf has nearly ground to a halt. As the blockade lasts much longer than markets initially feared, and with crude demand tightening across various industries, Brent crude prices breached $100 per barrel again this week.
Analysts and oil industry executives state that the prospects for a rapid restoration of Gulf crude supplies continue to deteriorate. Even if the Strait of Hormuz reopens tomorrow, the damage inflicted on the global economy by this crisis will be long-lasting.
Restarting this region, which boasts the world's highest production capacity, involves overcoming significant engineering challenges and logistical obstacles.
Middle Eastern oil producers must wait for tankers scattered across the globe to finish unloading, return, and regroup—a process that could take months. Oil storage tanks filled with backlogged inventory must be cleared to make space for subsequent crude production. Furthermore, a large number of workers who evacuated the region after the conflict began need to return.
Russell Hardy, CEO of commodity trading giant Vitol, stated at an industry event this week, "A vast amount of energy infrastructure has been completely shut down. Getting everything operational again will require a lengthy cycle."
Energy analysts at Goldman Sachs noted that the longer the Strait of Hormuz remains blocked, the slower the recovery of crude production capacity will be.
Restarting oil well production is currently one of the most significant challenges.
Iraq, the second-largest oil producer in the Middle East after Saudi Arabia, has been hit the hardest. Data from Mohammed Hussein of industry publication Iraq Oil Report shows that before the conflict, Iraq produced 4.9 million barrels per day. Following the outbreak of hostilities in late February, daily output plummeted to approximately 1.6 million barrels.
Iraqi government officials reported that the country's oil companies conducted initial restart tests last week but halted them abruptly due to the lack of a clear timeline for reopening the Strait of Hormuz.
Deteriorating security conditions, the large-scale departure of foreign workers, and supply shortages have made it difficult to assess the actual damage to some oil fields. It is believed that Iran-aligned militias within Iraq orchestrated recent attacks on oil fields while continuing to sabotage energy infrastructure across the Middle East.
Some older fields can only be restarted slowly: viscous crude wells are prone to accumulating paraffin and asphalt-like impurities that clog pipelines. Extended shutdowns cause a significant drop in reservoir pressure; after restarting, the proportion of natural gas often increases while crude output decreases.
Energy consultancy Wood Mackenzie estimates that it would take about nine months for southern Iraqi oil fields to recover to 85% of their pre-conflict capacity, though about two-thirds of pre-war levels could be restored relatively quickly in the short term.
The hasty shutdown of equipment early in the conflict not only damaged the wells themselves but also critical extraction equipment like submersible pumps, which are essential for pumping crude from low-pressure fields.
Iraqi officials stated that the high cost of restarting fields, coupled with a significant expected decline in future oil revenue, will further hinder recovery efforts. Another challenge is that while countries like Saudi Arabia have national tanker fleets, Iraq relies entirely on international traders and shipping companies, lacking control over its own maritime transport.
Jeff Miller, CEO of oilfield services giant Halliburton, said, "The longer oil and gas facilities remain shut down, the greater the technical difficulty and cost of restarting them."
Fraser McKay, Head of Upstream Oil and Gas Research at Wood Mackenzie, noted that the actual production loss remains unknown until engineers conduct on-site inspections and attempt restarts, representing the biggest uncertainty in the current energy market.
Analysts believe that Saudi Arabia and the UAE, with their long-term,精细 management of reservoir pressure, have relatively better conditions for restarting, but even their capacity cannot rebound instantly.
Data from the International Energy Agency indicates that approximately half of the Gulf's oil fields have sufficient reservoir pressure to restore pre-conflict production levels within two weeks. About 80% of fields could resume production within six weeks.
The remaining 20% of high-risk production capacity is concentrated mainly in Iraq and Kuwait, whose conventional crude production accounts for 3% of global output. The IEA warns that some pre-conflict production capacity may be permanently lost.
Due to the blockade of the Strait of Hormuz, Iraq has been forced to reroute its crude shipments, leading to long queues of tanker trucks on Syrian highways.
For the oil market, global crude supplies will remain unstable for an extended period.
Iraq has limited crude storage and pipeline export capacity, putting it under greater pressure to cut production compared to its neighbors. To maintain exports as much as possible, Iraq has increased flows through the pipeline from the Kurdistan region to Turkey and is also transporting fuel oil by road via tanker trucks to Syria's Mediterranean coast.
However, these alternative transport methods have very low capacity and provide only minimal relief. Yesar Al-Maliki, a Gulf affairs analyst at Middle East Economic Survey and a nonresident fellow at the Atlantic Council, stated, "While the solutions are inefficient, Iraq has no choice but to rely on these emergency measures for the long term."
Iraq is now facing its third major oil field restoration effort in a generation. Its crude production plummeted during the two Gulf Wars; subsequent recovery and growth beyond Saddam-era levels were achieved through investments from international firms like BP and Eni.
The Rumaila field, Iraq's largest, is operated by a joint venture of BP and PetroChina in cooperation with Iraq's state-owned oil company. Under normal conditions, it accounts for one-third of the country's total crude output, sustained by hundreds of wells.
Rumaila and most of Iraq's low-pressure fields commonly use water injection techniques for extraction. Ahmed Mehdi of consultancy Renaissance Energy Advisors explained that some wells require injecting three barrels of water to produce one barrel of oil.
During extended shutdowns, oil and water can mix uncontrollably. After restarting, precise management of water injection rates and the oil-water ratio is essential for stable production.
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